J  K 

yV3 


UC-NRLF 


The  Civil  service 


Civil  Pensions  in  Foreign 
Countries 


Munici[>al  and  Private  Systems 
in  the  United  States 


COMMITTEE  OF  ONE  HUNDRED 

726.727  COLORADO  BUILDING 
WASHINGTON 


1  Jl2 


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Committee  of  One  Hundred 

The  Committee  of  One  Hundred  is  an  organiza- 
tion which  had  its  inception  in  Washington  and 
was  started  by  twenty-one  business  and  profes- 
sional men  of  the  city  who  associated  themselves 
together  for  the  purpose  of  endeavoring  to  in- 
crease the  pay  of  Federal  employees  and  to 
secure,  if  possible,  legislation  for  the  retirement 
of   those   who   are   superannuated   or    disabled. 


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http://www.archive.org/details/civilserviceciviOOcommrich 


COMMITTEE  OF  ONE  HUNDRED 

The  objects  and  the  warrant  for  such  an  association 
are  set  forth  in  the  following  Statement  issued  by  the 
Committee : 

STATEMENT. 

"The  committee  of  citizens  in  charge  of  the  movement 
to  secure  legislation  for  increased  compensation  and  a  wise 
retirement  system  for  the  civil  service  employees  of  the 
National  Government  and  of  the  District  of  Columbia  deems 
it  proper  to  make  this  statement: 

"The  enormous  increase  in  the  cost  of  living  has  fallen 
with  especial  hardship  on  the  classes  receiving  salaries  or 
wages,  and  of  these  classes,  the  employees  of  the  United 
States  and  District  governments,  particularly  have  suffered. 
To  meet  the  necessities  of  the  case  an  increase  of  com- 
pensation is  imperative. 

'The  necessity  for  this  increase  has  been  evidenced  by 
the  increase  in  the  salaries,  not  only  of  all  persons  in  private 
employment  throughout  the  country,  but  also  of  practically 
all  persons  in  the  employ  of  the  government  of  the  United 
States,  except  those  in  the  classified  service-  It  is  clear  that 
the  salaries  of  those  in  the  classified  service  must  likewise 
be  increased  to  meet  the  advanced  cost  of  living  and  to  es- 
tablish greater  efficiency  and  economy  in  the  administration 
of  the  government. 

"For  more  than  fifty  years  there  has  been  no  change  in 
the  salaries  of  these  employees ;  no  general  readjustment  of 
this  pay  roll.  During  these  same  years  the  compensation  of 
labor  outside  of  the  government  service  generally  has  been 
substantially  and  properly  increased — in  many  callings  from 

3 

251210 


.  .••  .». •«•  •      • 


50  to  100  per  cent — in  response  to  the  enormously  increased 
cost  of  living. 

'To  promote  greater  efficiency  and  economy  there  should 
also  be  devised  a  sound  system  of  retirement,  beneficial  to 
the  faithful  employee  and  to  public  service. 

**In  response  to  the  appeal  to  the  public,  a  guarantee  fund 
is  being  subscribed,  to  be  placed  at  the  disposition  of  the 
committee,  to  meet  the  necessary  expenses  of  conducting, 
to  a  successful  conclusion,  the  movement  thus  inaugurated. 
"Whatever  amount  may  be  called  in  from  the  subscribers 
to  the  guaranty  fund  will  be  spent  under  the  public  eye; 
the  books,  records,  and  accounts  of  the  committee  will  be 
open  at  all  times  to  public  inspection,  and  all  moneys  re- 
ceived and  paid  out  will  be  rigidly  accounted  for. 

"The  bureau  established  by  the  committee  is  under  the 
direction  of  former  Senator  Charles  Dick,  who  has  con- 
sented to  serve,  stipulating  that  his  services  shall  be  wholly 
gratuitous." 
(Signed) 

P.  B.  Chase,  Chairman. 

William  Knowles  Cooper,  Secretary. 

Charles  Dick,  Director. 

Archibald  M.  McLachlen,  Treasurer. 

William  S-  Corby,        Arthur  C.  Moses, 

Isaac  Gans,  Oliver  P.  Newman, 

Julius  Garfinkle,        Theodore  W.  Noyes, 

William  F.  Gude,         Thomas  Nelson  Page, 

Hugh  Harvey,  P.  J.  Ryan, 

D.  J.  Kaufman,  Frederick  L.  Siddons, 

Wilton  J.  Lambert,     Henry  L.  West, 

A.  D.  Marks,  T.  Louis  Willige, 

Albert  P.  Madeira,       John  W.  Yerkes. 

The  work  of  the  Committee  is  supported  by  a  fund  raised 
entirely  by  voluntary  subscriptions  of  the  citizens  of  the 
District  of  Columbia.  No  government  employee  has  con- 
tributed and  no  such  contribution  will  be  accepted. 


As  the  aim  of  the  Committee  is  to  secure  legislation  which 
will  benefit  all  Federal  employees,  and  as  the  employees  in 
the  classified  service  are  apportioned  as  nearly  as  possi- 
ble among  all  the  States  according  to  their  population,  it 
seemed  appropriate  that  the  membership  of  the  Committee 
should  be  enlarged  to  include  representatives  from  every 
State  in  the  Union.  This  has  been  done,  and  the  Commit- 
tee now  includes  many  distinguished  names,  men  who  are 
leaders  in  all  the  walks  of  life.  They  all  express  their 
sympathy  with  the  objects  the  Committee  is  seeking  to  ac- 
complish, and  have  oflfered  their  services  to  help  promote 
the  movement.  It  was  encouraging  that  nearly  all  the  re- 
sponses were  friendly  and  that  with  almost  no  exception 
the  letters  received  were  in  hearty  commendation  of  the 
work  the  Committee  has  undertaken. 

The  complete  list  of  membership  is  here  printed  entire 
for  the  first  time: 

Hon.  Milton  E.  Ailes,  Washington,  D.  C. 

Hon.  W.  H.  Andrews,  Albuquerque,  New  Mexico. 

Hon.  John  M.  Allen,  Tupelo,  Miss. 

Hon.  Wm.  S.  Bennett,  New  York  City. 

Hon.  C.  M.  Barnes,  Guthrie,  Okla. 

Hon.  E.  J.  Burkett,  Lincoln,  Neb. 

Hon.  M.  G.  Bulkeley,  Hartford,  Conn. 

Hon.  Geo.  M.  Bartlett,  Tonopah,  Nev. 

Gen.  R.  B.  Brown,  Zanesville,  O. 

Mr.  Robert  B.  Brown,  Washington,  D.  C 

Mr.  J.  N.  Breneman,  Richmond,  Va. 

Mr.  Ashmun  N.  Brown,  Washington,  D.  C. 

Mr.  George  H.  Bahrs,  San  Francisco,  Cal. 

Mr.  Robert  H.  Bryson,  Indianapolis,  Ind. 

Hon.  D.  Russell  Brown,  Providence,  R.  I. 

Mr.  P.  B.  Chase,  Washington,  D.  C. 

Mr.  Wm.  K.  Cooper,  Washington,  D.  C 

Gen   Powell  Gayton,  Washington,  D.  C. 

Hon.  John  C.  Chaney,  Sullivan,  Ind. 


Hon.  Bird  S.  Coler,  New  York  City. 

Hon.  Geo.  W.  Cromer,  Muncie,  Ind. 

Hon.  John  C.  Capers,  Washington,  D.  C. 

Mr.  Wm.  S.  Corby,  Washington,  D.  C. 

Hon.  Ralph  H.  Cameron,  Flagstaff,  Ariz. 

Hon.  John  C-  Cutler,  Salt  Lake  City,  Utah. 

Hon.  J.  O.  Davidson,  Madison,  Wis. 

Hon.  Wm.  M.  O.  Dawson,  Charleston,  Va. 

Hon.  E.  C  Duncan,  Raleigh,  N.  C. 

Mr.  F.  E.  Doty,  Madison,  Wis. 

Hon.  Fred  T.  Dubois,  Blackfoot,  Idaho. 

Hon.  John  Joy  Edson,  Washington,  D.  C. 

Hon.  Samuel  H.  Elrod,  Clark,  S.  Dak. 

Mr.  John  L.  Erickson,  Washington,  D.  C. 

Hon.  Charles  N.  Fowler,  Elizabeth,  N.  J. 

Gen.  John  D.  Frost,  Columbia,  S.  C. 

Mr.  Charles  S.  Forbes,  St.  Albans,  Vt. 

Hon.  A.  G.  Foster,  Tacoma,  Wash. 

Hon.  Frank  Frantz,  Muskogee,  Okla. 

Mr.  Julius  Garfinkle,  Washington,  D.  C. 

Mr.  Isaac  Cans,  Washington,  D.  C. 

Hon.  John  W.  Griggs,  Paterson,  N.  J. 

Hon.  Robert  Grant,  Probate  Judge,  Boston,  Mass. 

Hon.  Washington  Gardner,  Albion,  Mich. 

Hon.  Paris  Gibson,  Great  Falls,  Mont. 

Hon.  Herman  P.  Goebel,  Cincinnati,  O. 

Hon.  Jos.  A.  Goulden,  New  York  City. 

Mr.  A.  B.  Garretson,  Pres.  Order  of  Railway  Conductors, 

Cedar  Rapids,  Iowa. 
Hon.  J.  N.  Gillett,  San  Francisco,  Cal. 
Hon.  F.  W.  Hackett,  Washington,  D.  C. 
Hon.  H.  C.  Hansbo rough,  Devil's  Lake,  N.  D. 
Hon.  A.  L.  Harris,  Eaton,  O. 
Hon.  James  H.  Hoyt,  Cleveland,  O. 
Hon.  E.  R.  Harper,  Denver,  Colo. 
Hon.  James  H.  Hawley,  Governor,  Boise,  Idaho. 


Mr.  Qinton  H.  Hartson,  Boise,  Idaho. 

Mr.  A.  M.  Hayes,  St.  Paul,  Minn. 

Dr.  John  Wesley  Hill,  Pastor  Metropolitan  Temple,  New 

York  City. 
Mr.  Joseph  Haag,  New  York  City. 
Mr.  Hugh  Harvey,  Washington,  D.  C. 
Hon.  H.  J.  Hagerman,  RoswelJ,  New  Mexico. 
Mr.  Timothy   Healy»   Pres.   International   Brotherhood  of 

Stationary  Firemen,  New  York  City. 
Hon.  Eldridge  Hanecy,  Chicago,  III 
Hon.  W.  M.  Jenkins,  Guthrie,  Okla. 
Hon.  Walter  H.  Johnson,  Atlanta,  Ga. 
Dr.  David  Starr  Jordan,  Pres.  Stanford  University,  Cal. 
Hon.  Charles  F.  Joy,  St.  Louis,  Mo. 
Hon.  John  L.  Kennedy,  Omaha,  Neb. 
Mr.  Leo  Kryzcki,  Milwaukee,  Wis. 
Mr.  E.  C.  Kontz,  Atlanta,  Ga. 
Mr.  D.  J.  Kaufman,  Washington,  D.  C 
Hon.  J.  F.  Lacey,  Oskaloosa,  Iowa. 
Hon.  Seth  Low,  New  York  City. 
Hon.  L.  F.  Livingston,  Porterdale,  Ga. 
Mr.  I.  D.  Laferty,  Cleveland,  O. 
Mr.  J.  M.  Lynch,  Pres.  International  Typographical  Union, 

Indianapolis,  Ind. 
Hon.  Cecil  A.  Lyon,  Sherman,  Texas. 
Mr.  Wilton  J   Lambert,  Washington,  D.  C. 
Mr.  A.  M.  McLachlen,  Washington,  D.  C. 
Hon.  D.  H.  Mercer,  Omaha,  Neb. 
Hon.  H.  L.  Maynard,  Portsmouth,  Va. 
Hon   J.  G.  McCullough,  North  Bennington,  Vt 
Hon.  D.  W.  Mulvane,  Topeka,  Kan. 
Gen.  I.  F.  Mack,  Sandusky,  O. 
Col.  John  McElroy,  Editor  National  Tribune,  Washington, 

D.  C. 
Mr.  A.  D.  Marks,  Washington,  D.  C. 
Mr.  Albert  P.  Madeira,  Washington,  D.  C 
Mr.  Arthur  C.  Moses,  Washington,  D.  C. 


8 

Hon.  F.  W.  Mulkey,  Portland,  Ore. 

Hon.  Thos.  K.  Niedringhaus,  St.  Louis,  Mo. 

Mr.  Oliver  P.  Newman,  Newspaper  Enterprise  Assn.,  Chi- 
cago, 111. 

Mr.  Theodore  W.  Noyes,  Washington,  D.  C. 

Hon.  John  K  Osborne,  Rawlins,  Wyo- 

Hon.  Geo.  W.  Peck,  Milwaukee,  Wis. 

Hon.  Geo.  A.  Pearre,  Cumberland,  Md. 

Dr.  Thomas  Nelson  Page,  Washington,  D.  C. 

Mr.  W.  B.  Powell,  Tampa,  Fla. 

Hon.  C.  A.  Pugsley,  Peekskill,  N.  Y. 

Hon.  S.  H.  Piles,  Seattle,  Wash. 

Hon.  Wm.  Barret  Ridgely,  New  York  City. 

Hon.  M.  D.  Ratchford,  Massillon,  O. 

Mr.  P,  J.  Ryan,  Washington,  D.  C. 

Hon.  Victor  Rosewater,  Omaha,  Neb. 

Hon.  W.  S.  Shallenberger,  Washington,  D.  C. 

Hon.  A.  J.  Seay,  King^sher,  Okla. 

Dr.  Josiah  Strong,  Pres.  American  Institute  of  Social  Ser- 
vice, New  York  City. 

Dr.  Wm.  Arnold  Shanklin,  President  Wesleyan  Univer- 
sity, Middletown,  Conn. 

Mr.  Frederick  L.  Siddons,  Washington,  D.  C. 

Dr.  W.  O.  Thompson,  President  Ohio  State  University, 
Columbus,  O- 

Dr.  Charles  F.  Thwing,  President  Western  Reserve  Uni- 
versity, Cleveland,  O. 

Hon.  John  M.  Thurston,  Washington,  D.  C. 

Gen.  Charles  A.  Turner,  Providence,  R.  I. 

Hon.  George  Turner,  Spokane,  Wash. 

Hon.  B.  F.  Tracy,  New  York  City. 

Hon.  Chas.  A.  Towne,  New  York  City. 

Hon.  Bartlett  Tripp,  Yankton,  S.  D. 

Mr.  Judson  C.  Welliver,  Washington  Times,  Washington, 
D.  C 

Gen.  James  H.  Wilson,  Wilmington,  Del. 


Hon.  Henry  White,  Washington,  D.  C. 
Hon.  I.  P.  Wagner,  Norristown,  Pa. 
Hon.  Heber  M.  Wells,  Salt  Lake  City,  Utah. 
Hon.  James  E.  Watson,  Rushville,  Ind. 
Mr.  Philip  Werlein,  New  Orleans,  La. 
Mr.  W.  A.  Williams,  Forest  Grove^  Ore. 
Hon.  Henry  Woodyard,  Spencer,  W.  Va. 
Mr.  Geo.  L.  Whitford,  Washington,  D.  C. 
Hon.  Henry  L.  West,  Washington,  D.  C 
Mr.  J.  Louis  Willige,  Washington,  D.  C. 
Hon.  John  L.  Wilson,  Seattle,  Wash. 
Hon.  Rollin  S.  Woodruff,  New  Haven,  Conn- 
Hon.  N.  C.  Young,  Fargo,  N.  Dak. 
Hon.  John  W.  Yerkes,  Washington,  D.  C. 
Hon.  Lafayette  Young,  Des  Moines,  Iowa. 

The  Committee  is  not  preparing:  any  bill  for  introduction 
in  Congress,  nor  is  it  urging  the  adoption  of  any  now 
pending.  It  does  not  favor  any  particular  plan  or  system 
of  retirement.  The  efforts  of  the  Committee  will  be  de- 
voted to  ag^itation  of  the  matter  and  to  the  education  of  pub- 
lic sentiment  to  the  necessity  of  some  adequate  and  fair 
system  of  retirement  of  Federal  employees  who  have  grown 
old  and  grey  in  the  service,  and  after  long  and  honorable 
service  are  no  longer  able  to  provide  for  themselves.  The 
particular  form  such  legislation  will  take  is  a  matter  for 
Congress  to  decide. 


THE  CIVIL  SERVICE  LAW  AND  RETIRE- 
MENT 

The  Civil  Service  law  now  on  the  statute  books, 
which  is  the  foundation  of  the  Federal  civil  service,  was 
approved  by  President  Arthur  January  i6,  1883-  When 
the  law  went  into  operation  it  covered  13,924  competitive 
positions.  Owing  to  the  gradual  extension  of  the  law  in 
nearly  every  branch  of  the  service  and  also  to  the  natural 
growth  of  the  various  Federal  departments,  the  Civil  Ser- 
vice law  has  now  been  extended  to  over  224,000  employees, 
whose  positions  are  subject  to  competitive  examination. 
The  law  operates  mainly  to  control  entrance  into  the  civil 
service  and  to  prevent  dismissal  except  for  cause.  Po- 
litical affiliations  and  convictions  are  no  longer  a  ground 
for  separation  from  the  service.  The  law  has  not  been  so 
successful  in  controlling  promotions  within  the  service. 
There  has  been  apparently  well  grounded  complaint  that 
promotions  have  not  always  been  made  strictly  in  accord- 
ance with  merit.  Again,  in  most  cases  promotion  in  the 
government  service  means  no  change  in  work  and  no  ad- 
vancement whatever  except  in  pay,  and  this  explains  why 
$900  and  $1,600  clerks  are  sometimes  employed  side  by  side 
doing  exactly  the  same  kind  of  work.  Such  inequalities 
do  not  tend  to  increase  efficiency  in  the  service,  and  one 
of  the  prime  needs  is  for  a  re-classification  of  the  entire 
Federal  civil  service. 

The  Civil  Service  Commission  in  its  last  annual  report, 
says  on  this  point: 

"The  commission  renews  its  recommendation  for  legis- 
lation for  a  re-classification  of  salaries  on  the  basis  of  work 
performed.  As  previously  stated,  it  is  beheved  that  such 
a  re-classification  is  the  first  essential  step  in  any  effective 


II 

forward  movement  toward  improving  the  personnel  of  the 
departments  and  thus  bringing  about  greater  efficiency  and 
economy.  It  is  also  believed  to  be  prerequisite  to  any  scheme 
for  retirement  and  essential  to  any  further  satisfactory  and 
effective  reform  in  the  civil  service." 

One  of  the  most  insistent  demands  from  civil  service  em- 
ployees has  been  for  an  increase  of  salary,  based  on  the 
marked  increases  in  the  cost  of  living  and  backed  by  the 
fact  that  the  present  scale  of  clerical  salaries  was  estab- 
lished in  1854.  The  recent  increase  in  salaries  provided 
for  Senators  and  Congressmen  and  increases  in  sal- 
aries of  judges  and  in  the  pay  of  officers  and  men  in  the 
Army  and  Navy  have  given  impetus  to  the  claim. 

BUDGET  OF  A  $1,200  GOVERNMENT  EMPLOYEE 

In  connection  with  the  claim  that  the  average  Gov- 
ernment clerk  is  extravagant  and  could,  with  proper  man- 
agement and  due  economy,  live  within  a  salary  of  $1,200 
per  annum,  enjoy  such  social  pleasures  as  may  be  neces- 
sary to  his  well-being  and  save  sufficient  for  "rainy  days" 
and  old  age,  the  following  itemized  statement  is  sub- 
mitted of  the  expense  of  providing  for  a  family  consisting 
of  a  clerk,  his  wife  and  six-year-old  daughter;  the  wife 
doing  all  her  own  housework,  excepting  the  weekly  wash- 
ing, and  all  her  sewing,  except  one  street  suit  a  year. 
Their  residence  is  a  six-room  cottage  six  miles  in  the  sub- 
urbs: 

MONTHLY  EXPENSES 

Rent   (see  note  i) $27.50 

Groceries  and  meats  (see  note  i  1-2) 28  00 

Milk   (8c  a  quart) 2.50 

Dress  (see  note  2) 12.00 

Wash  (4  at  6oc  each) 2.40 


12 

Laundry  (collars  and  cuffs) 60 

Fuel  (see  note  3) 4.00 

Carfare  (see  note  4) 7.20 

Kerosene  for  lamps 50 

Papers,  magazines,  school  books 80 

Insurance    ($3,000  policy) 6.00 

Departmental  Benefit  Ass'n  (see  note  5) 60 

Tax  on  chattels   ($5.50  annually) 45 

Doctor,  dentist  and  optician   (average) 1.50 

Church  $1,00,  Sunday  school  .20 1.20 

Total  expense   for  month $95-25 

This  leaves  a  balance  of  $4.75  to  expend  for  the  wear 
and  tear  on  furniture,  rugs,  curtains,  the  breakage  of 
crockery  and  china,  monthly  haircut,  and  the  hundred  and 
one  little  odds  and  ends  of  expense  always  cropping  up  in 
the  monthly  household  account,  and  in  addition  to  all  this 
it  is  supposed  to  form  the  foundation  of  a  "rainy  day" 
fund,  or  an  old-age  bank  account. 

This  employee  says: 

"This  is  in  Washington  where,  through  no  fault  of  Gov- 
ernment employees,  the  standard  of  living  is  extremely 
high.  Remember,  also,  that  the  child  is  but  six  years  old — 
from  whence  will  come  the  funds  necessary  to  meet  the 
unavoidable  increase  in  cost  of  her  dress  and  education  as 
she  becomes  older,  and  the  little  social  pleasures  necessary 
to  the  welfare  of  any  growing  child? 

"Remember,  also,  there  is  but  one  child.  The  outlay  inci- 
dent to  her  birth  was  as  follows: 

Medical  attendance $35-00 

Medicines,  etc.   (approximate) 5.00 

Hospital  room,  2  weeks 40  00 

Operating  room,  use  of 5.00 

Extra  nurse,  3  days 15.00 


13 

Cab,  to  and  from  hospital 4.00 

Servant,  3   weeks 12.00 

Baby   cab 3.00 

Total    $120.00 

"How  about  the  Government  clerk  who  may  have  a  birth 
in  his  family  every  second  or  third  year?  He  ought  to 
have,  if  he  avoid  the  reproach  of  "race  suicide,"  at  least 
three  children.  Average  his  expenses  up  for  that  cause 
alone,  add  it  to  his  average  current  monthly  expense,  and 
watch  that  $475  balance  assume  microscopic  proportions. 

"I  am  a  person  of  moderate  desires,  or  have  trained  my- 
self to  be  one  since  I  entered  Government  service  and  mar- 
ried. I  neither  smoke,  chew  or  drink ;  I  belong  to  no  clubs, 
and  to  but  one  lodge,  wherein  the  yearly  dues  are  but  $4.00. 
My  wife  belongs  to  no  lodges  or  clubs.  She  is  a  good  man- 
ager, economical  in  kitchen  and  home,  and  asks  but  enough 
in  dress  to  meet  her  friends  on  a  fairly  level  basis  and 
without  embarrassment. 

"We  have  been  in  an  opera  house  but  once  in  ten  months 
— a  vaudeville  house  at  50c  a  seat.  During  the  past  year 
we  have  had  about  18  days  away  from  home,  the  expense 
incident  thereto  for  travel  and  hotel  bills  was  about  $60.00 
— I  worked  nights  for  private  parties  to  secure  the  money 
to  pay  those  bills.  Last  year  we  had  no  vacation  or  change 
whatsoever. 

"  The  laborer  is  worthy  of  his  hire' — at  least  it  is  so 
stated — and  any  man  possessing  the  necessary  ability  and 
education  to  pass  civil  service  examinations  in  stenography, 
typewriting  and  accounting,  and  to  pass  on  work  involv- 
ing the  expenditure  of  hundreds  of  thousands  of  dollars 
of  Government  funds  is  surely  entitled  to  a  wage  sufficient 
to  provide  himself  and  family  with  food,  clothing  and  shel- 
ter, the  education  of  his  children,  a  few  social  pleasures  and 
to  lay  up  a  fund  toward  the  payment  of  a  home  or  a  fund 
for  old  age." 


14 
NOTES 

Note  I.  Rent  might  be  cheaper.  For  $22.50,  and  less 
carfare,  one  may  get  a  comfortable  house  of  five  or  six 
rooms  from  the  Sanitary  Improvement  Company — one  of 
a  row,  no  yard  in  front,  about  I4'x35'  yard  in  back,  with 
family  either  above  or  below,  with  two  inside  rooms  ven- 
tilated only  by  a  skylight  in  ceiling.  My  residence  gives 
me  detached  house,  yard  i20*xi5o',  no  colored  neighbors, 
and  child  is  not  playing  on  street.  Is  not  the  additional 
amount  well  spent? 

Note  I   1-2.     Grocery  bill  for  past  month  (October,  191 1)  : 

Bread— 

27  loaves  @  5c $  1.35 

21-2  doz.  Rolls  @  IOC 25 

Butter— 

4  lbs.  @  35c 1.40 

6  lbs.  @  37c 2.22 

Sugar — 

40  lbs.  @  7  I-2C .* 3.00 

Some  used  for  preserving  fruit- 
Eggs— 

3  doz.  @  33c 99 

6  doz.  @  35c 2.10 

Lard — 

3  lbs.  @  13c 39 

Cereals — 

3  boxes  Shredded  Wlieat  @  12  i-2c 38 

5  lbs.  Oatmeal  @  loc.  .  . 50 

I   lb.  Rice 10 

Crackers — 

3  lbs.  Soda  @  IOC 30 

I    lb.    Nabisco 20 

Fruit — 

1-2  bu.  Apples  for  cooking 60 


15 

I   doz.  bananas 20 

I  basket  grapes 15 

Vegetables — 

1-2  bu.  Irish  potatoes 75 

1-2  pk.  Sweet  potatoes 20 

1  basket  Tomatoes 40 

3  bunches   Celery 25 

2  bunches   Lettuce 10 

I  can  Peas 13 

Note  2.    Clothing — itemized  for  one  year: 

SELF 


I  Suit $23.00 

I  Hat  (straw) 2.00 

1  Hat    (felt) 2.50 

12  Pair   SOX 3.00 

3  Neckties   1.50 

8  Linen  collars i.oo 

2  Pair   cuffs 50 

2  Suits  underwear 

(wool)    4.00 

2  Suits  underwear 

(cotton)   2.00 


I  Pair   suspenders..  .50 

I  Pair  garters 25 

I  Pair  low  shoes...  3.00 

1  Pair  high  shoes . . .  3.00 

2  Pair  half  soles . . .  2.00 

I  Pair  rubbers i.oo 

I  Pair  winter  gloves  1.25 
I  Overcoat  ($20) 

good  for  4  yrs.  5.00 

4  Shirts 5.00 

6  Linen   kerchiefs.,  i.oo 


For  the  year..  .$61.50 


WIFE 


I  Street  suit $25.00 

1  House   dress 7.00 

2  Work  dresses....     2.00 
I  Summer   hat 3.00 

1  Winter  hat 5.00 

2  Pair  shoes 5.00 


Hose   3.00 

Kerchiefs    1.50 

3  Shirt    waists 4.50 

Underwear,  corsets  5.00 

2  Pair  gloves 2.50 


For  the  year..  .$63.50 


i6 
DAUGHTER 

I  Dress    4.00        i  Winter   hat 2.50 

3  Play  dresses 4.00       8  Pair  hose 2.50 

3  Pair  shoes 6.00  Underwear 3.00 

I  Summer  hat i  .cx)        i  Pair  rubbers 60 

Hair  ribbons 50       Gloves  and  mittens  i.oo 


For  the  year $24.60 

RECAPITULATION 

Self    $61.50 

Wife   63.50 

Daughter    2460 

Yearly   Total $149.60 

Note  3.    Fuel: 

Six  tons  coal  @  $7.25 $43.50 

Kindling  wood,  etc.  (approx.) 4.50 

Yearly  total  for  fuel  for  heat $48.00 

All  cooking,  washing,  etc.,  is  done  over  kerosene  stove, 
the  oil  for  which  is  included  in  grocery  bill.  The  above 
is  for  heating  purposes  only. 

Note  4.     Carfare : 

Self  to  work — 26  round  trips — 

52  car  tickets  @  4  i-6c $2.20 

I  commutation  book,  suburban,  26  rd.  trips 1.80 


$  4. 
W^ife — An  average  of  3  round  trips  to  city  monthly: 
Cash  fares  each  way  @  20c  for  rd.  trip 1 


$  4.00 
.60 


17 

Daughter — Average  monthly  expenditure  for  carfare 
to  school 2.60 


Total  carfare  for  month $7.20 

Note  5.  Beneficial  Insurance:  Burial  fund  insurance, 
payable  to  family  immediately  upon  proof  of  employee's 
death. 

Meat— 

2  1-2  lbs.  Veal  chops  @  20c 50 

1  lb.  Lamb  chops  @  20c 20 

3  lbs.  Round  Steak  @  i8c 54 

2  lbs.  Sirloin  steak  @  20c 40 

1  lb.  Sliced  ham 25 

2  lbs-  Fresh  Fish 25 

I    lb.  Halibut  steak 20 

1  1-2  lbs.  Sausage  @  15c 23 

4  lbs.  Leg  of  Lamb  @  19c y6 

3  lbs.  Pot  Roast  @  15c 45 

Cheese    25 

Soap — 

3  cakes  Ivory  Soap 15 

6  cakes  Naptha  Soap 30 

I  cake  Bon  Ami  Scouring  Soap 10 

Miscellaneous — 

I  doz.  Glass  Jars  for  preserving  fruit 60 

1  Box    Bluing 10 

2  bottles  Olive  Oil 50 

I  bottle  Ammonia  for  household  cleaning 10 

I  bottle   Vanilla   Extract 10 

I  bottle  Lemon   Extract 10 

I  lb.  Raisins 12 

I  cake  Chocolate 20 

I  lb.  Baking  Powder 25 

6  boxes  Matches 10 

I  sack  Salt 05 

2 


i8 

I  lb.  Starch 05 

I   lb.   Tea 60 

I  lb.  CoflFee 25 

Kerosene  Oil,  35  Gals.  @  loc i 3.50 

Furnished  all  heat  for  cooking,  baking,  washing, 

etc.     No  coal  or  wood  used  for  such  purposes. 

1-2  Gal.  Gasoline  for  cleaning  floors 10 

Total  expenditure  for  the  month $27.26 

P.  S. 

'*1  believe  if  several  household  expense  statements  were 
obtained  and  presented  in  proper  form  to  those  in  authority 
for  their  inspection  and  consideration  it  would  do  good. 
If  we  are  extravagant  they  would  then  be  in  a  position  to 
tell  us  how  to  become  more  economical.  If  we  are  not  ex- 
travagant they  would  be  in  a  position  to  say  so  and  grant 
an  increase  of  wage  upon  that  basis.  In  either  event  we 
would  benefit,  as  a  saving  in  expenditures  is  as  good  as  an 
increase  in  salary.  But  in  arriving  at  a  decision  let  them 
base  their  judgment  upon  Washington  prices  and  con- 
ditions, not  upon  the  prices  and  conditions  that  may  prevail 
elsewhere." 

SUPERANNUATION 

One  of  the  most  serious  problems  in  the  Civil  Service  is 
that  of  superannuation,  the  problem  of  what  to  do  with 
employees  who  have  grown  old  or  have  become  dis- 
abled in  the  service.  There  is  a  strong  prejudice  in  the 
United  States  against  civil  pensions,  due  partly  no  doubt 
to  the  steadily  increasing  and  great  cost  of  military  pensions. 
Federal  judges,  however,  are  retired  with  full  pay  at  the 
age  of  70  years  after  10  years'  service,  and  Army  and 
Navy  officers  are  retired  for  age  on  three-quarters  pay 
without  any  serious  objection  on  the  part  of  the  public. 
While  public  interest  in  superannuation  in  the  Federal  Civil 


19 

Service  may  be  of  comparatively  recent  birth  in  Washington, 
there  has  been  no  lack  of  discussion  of  the  subject  in  public 
reports.  The  i6th  annual  report  of  the  Civil  Service  Com- 
mission for  the  year  ending  June  30,  1899,  treated  the  sub- 
ject somewhat  at  length,  as  will  appear  from  the  following 
quotations : 

"The  question  of  the  superannuation  of  employees  as 
affecting  the  efficiency  of  the  service  is  worthy  of  serious 
consideration,  and  bills  have  been  repeatedly  introduced  in 
Congress  having  in  view  the  retirement  of  such  employees." 

Reference  is  made  to  the  Joint  Commission  of  Congress 
appointed  in  1893  to  inquire  into  the  organization  of  the 
executive  departments  at  the  National  Capital,  which  found 
that  of  17,073  employees  in  the  executive  civil  service  at 
Washington,  1416  were  60  years  or  over,  288  were  70  years 
or  over,  while  40  were  80  years  or  over.  In  1897  ^^e  Sec- 
retary of  the  Treasury  in  an  effort  to  find  relief  from  the 
burden  imposed  on  his  department  by  aged  and  incapaci- 
tated imployees  who  hindered  the  proper  performance  of 
work  created  an  Honorable  Service  Roll  to  which  were  to 
be  transferred  all  employees  whose  usefulness  had  become 
impaired  by  age,  and  70  was  fixed  as  the  age  for  transfer. 
All  employees  borne  on  this  roll  were  to  be  paid  a  salary 
of  $700.  This  practice  was  promptly  stopped  by  Congress 
on  the  ground  that  it  tended  to  the  establishment  of  a  civil 
pension  list.  The  report  of  the  Commission  proceeds  as 
follows : 

"It  must  be  admitted,  however,  that  the  question  of  the 
superannuation  of  employees  is  a  serious  one  confronting 
those  who  are  responsible  for  the  proper  and  efficient  ad- 
ministration of  the  work  of  the  executive  civil  service.  As 
shown  by  the  report  of  the  Joint  Commission  of  Congress, 
there  are  incapacitated  employees  in  various  departments, 
and  there  can  be  no  doubt  that  their  retirement  would  be 
in  the  interest  of  good  administration.     It  is  unfortunately 


20 

true  that  many  of  these  employees  are  in  high  grade  po- 
sitions, some  of  them  having  supervision  of  the  work  of 
others,  and  their  lack  of  energy  and  inability  to  perform 
the  work  assigned  them  are  very  detrimental  to  the  service." 

THE  CIVIL  SERVICE  LAW   AND   PERMANENCY 
OF  TENURE 

The  text  of  the  civil  service  law  itself  does  not  promote 
superannuation  in  the  service,  although  the  practical  oper- 
ation of  the  law  does  work  that  way.  The  19th  annual 
report  of  the  Civil  Service  Commission  says  on  this  point: 

"Opponents  of  the  competitive  system  urge  that  its  per- 
manency of  tenure  tends  to  promote  superannuation  in  the 
public  service.  The  civil  service  law  itself  provides  for 
no  permanency  of  tenure.  Any  employee  can  be  dismissed 
at  any  time,  but  the  old  motive  for  making  dismissals  is 
gone  as  the  new  appointments  are  not  made  through  fa- 
voritism or  influence.  Removals  are  much  fewer  than  for- 
merly. To  this  extent  the  act  has  promoted  a  permanency, 
and  a  very  much  smaller  proportion  of  persons  are  removed 
from  the  competitive  classified  service  than  from  other 
parts  of  the  service.  In  order  to  secure  justice  in  making 
such  removals  it  was  further  provided  by  executive  order 
that  the  appointing  officer  must  give  his  reasons,  with  proper 
notice  and  an  opportunity  for  answer,  to  the  person  pro- 
posed to  be  removed,  and  that  removal  should  only  be  made 
for  such  reasons  as  would  promote  the  efficiency  of  the 
service.  It  is  evident  that  under  this  rule,  rigidly  en- 
forced, no  person  ought  to  be  retained  in  the  public  service 
whose  dismissal  is  required  in  the  interests  of  good  admin- 
istration. But  it  is  also  true  that  from  humane  considerations 
appointing  officers  will  be  reluctant  to  dismiss  those  who 
have  become  superannuated  or  otherwise  incapacitated 
where  hardship  is  entailed  on  the  persons  so  removed,  and 
especially  in  cases  where  the  employee  in  question  has 
served  the  government  faithfully  for  many  years." 


21 


WHAT  SUPERANNUATION  COSTS  IN  WASHING- 
TON. 

That  superannuation  in  the  government  service  right 
here  in  Washington  is  costing  the  Government  a  large  sum 
every  year  is  made  apparent  by  a  report  on  the  subject  con- 
tained in  the  23rd  annual  report  of  the  Civil  Service  Com- 
mission. Acting  on  directions  given  by  the  President,  the 
Commission  collected  information  respecting  the  number 
and  efficiency  of  employees  in  Washington  over  60  years 
of  age.  Adjusting  the  salaries  of  the  1,626  employees  over 
65  years  of  age  to  work  which  would  be  performed  by 
thoroughly  efficient  employees,  shows  an  apparent  annual 
loss  through  lack  of  efficiency  due  to  superannuation  of 
over  $400,000. 

ROTATION  IN  OFFICE 

While  the  Civil  Service  law  apparently  operates  to  retain 
in  the  service  clerks  after  they  have  become  superannuated 
and  less  efficient,  it  apparently  fails  to  retain  in  the  service 
employees  who  are  young  and  efficient.  The  Civil  Service 
Commission  in  its  annual  reports  has  frequently  called  at- 
tention to  the  difficulty  of  securing  and  retaining  compe- 
tant  employees.     In  its  24th  report  it  says: 

"The  rotation  in  office  which  critics  of  the  merit  system 
formerly  said  was  insufficient,  is  now  so  frequent  as  to  se- 
riously impair  the  efficiency  of  the  service.  The  proportion 
of  separations  exceeds  10  per  cent  annually  in  the  depart- 
mental service,  and  in  some  branches  of  the  service  rises 
as  high  as  25  per  cent.  This  means  a  serious  loss  of  valuable 
employees  who  after  they  have  acquired  experience  and 
become  most  useful  leave  to  go  into  outside  employment 
because  of  the  lack  of  opportunity  in  the  Government  ser- 
vice. The  higher  positions  are  not  usually  filled  by  pro- 
motion, and  there  is  not  sufficient  inducement  for  the  most 
capable  man  to  enter  the  examination,  either  in  the  salary 


22 

immediately  offered  or  in  the  prospect  of  advancement. 
The  Government  service,  therefore,  instead  of  offering  a 
career  is  thus  being  regarded  as  a  mere  make-shift  by  many 
capable  young  men  who  leave  it  for  private  employment 
at  the  earliest  opportunity.  Nearly  30  per  cent  of  those 
who  are  offered  appointments  from  the  eligible  register 
decline  when  their  names  are  reached,  and  about  10  per 
cent  withdraw  from  the  register.  Under  certain  examina- 
tions the  declinations  amount  to  one-half  of  all  those  offered 
appointment,  as  in  the  case  of  male  stenographers  and  type- 
writers. This  means  that  in  some  instances  a  large  part 
of  the  work  of  the  Commission  goes  for  naught,  and  that 
the  departments  instead  of  securing  the  best  material  from 
the  register  are  only  able  to  obtain  persons  who  are  less 
successful  in  outside  business.  Much  time  is  also  ex- 
pended in  correspondence  because  of  successive  refusals  to 
accept  appointment.  Many  men  either  will  not  accept  the 
low  salary  or  having  once  entered  and  finding  little  chance 
of  increase,  pass  out  to  more  remunerative  fields  of  em- 
ployment." 

CIVIL  PENSIONS  IN  GREAT  BRITAIN 

If  the  payment  of  superannuation  and  disability  allow- 
ances to  employees  in  the  service  is  a  sign  of  national  pro- 
gress, then  the  United  States  is  one  of  the  most  backward 
nations,  for  Haiti  and  a  few  South  American  countries  are 
said  to  be  the  only  ones  which  do  not  maintain  a  civil  pension 
list.  The  practice  is  universal  in  all  other  Eno:lish  speaking 
countries.  Great  Britain  had  a  superannuation  fund  for 
employees  in  the  excise  department  which  was  supported  by 
deduction  from  the  salaries  of  the  employees,  almost  a  hun- 
dred years  before  the  separation  of  the  American  colonies. 
The  customs  service  created  a  similar  fund  in  1708.  The 
first  general  pension  law  was  passed  in  1810.  This  was  a 
non-contributory  act,  and  its  terms  were  so  liberal  that  the 
expenditures  for  civil  pensions  trebled  in  ten  years.  A  con- 
tributory law  was  short  lived,  but  was  again  resorted  to 


^3 

and  remained  in  force  23  years.  The  law  was  very  unpop- 
ular, mainly  because  no  refund  was  made  to  clerks  who 
resigned  or  died  before  reaching  the  age  of  retirement.  It 
was  shown  that  not  more  than  one  in  six  or  seven  who  con- 
tributed to  the  fund  remained  in  office  long  enough  to  se- 
cure any  return  for  what  he  paid  in.  Because  of  dissatis- 
faction with  this  law,  Parliament  in  1859  passed  a  new  law 
providing  for  free  and  universal  civil  pensions.  This  law 
grew  very  unpopular  because  the  clerks  thought  that  their 
pensions  were  merely  deferred  pay  and  kept  their  salaries 
lower  than  would  otherwise  have  been  the  case.  The  pres- 
ent law  on  the  subject  was  passed  in  1909,  and  benefits  are 
now  also  paid  to  those  who  resign  or  die  before  arriving  at 
the  pensionable  age.  The  lesson  taught  by  Great  Britain's 
century  and  more  of  experience  seems  to  favor  a  contribu- 
tory system  rather  than  a  straight  government  pension. 

NEW  SOUTH  WALES  AND  NEW  ZEALAND 

The  English  speaking  countries  in  the  southern  hemis- 
phere have  experimented  in  this  matter  for  over  half  a 
century,  and  have  made  many  changes  in  their  laws.  The 
examples  of  New  South  Wales  and  New  Zealand  are  typ- 
ical. New  South  Wales  established  a  straight  pension  sys- 
tem in  1854,  and  thirty  years  later  inaugurated  a  contributory 
plan  compelling  all  employees  to  pay  four  per  cent  annually 
of  their  salaries.  The  fund  soon  became  hopelessly  in- 
solvent, and  in  1902,  there  was  a  deficit  of  eight  and  a  half 
million  dollars  which  the  government  assumed.  All  enter- 
ing the  service  since  1895  have  been  required  to  take  out 
endowment  insurance  either  for  the  payment  of  a  lump  sum 
at  death  or  for  an  annuity  at  reaching  the  age  of  60  years. 
New  Zealand  passed  a  general  pension  law  in  1858  which 
had  to  be  abandoned  because  it  proved  too  expensive.  A 
compulsory  savings  scheme  was  then  tried,  and  5  per  cent 
per  annum  was  deducted  from  the  salary  of  every  employee 
which  was  repaid  with  interest  when  he  left  the  service. 
This  plan  proved  inadequate  as  a  means  of  taking  care  of 


24 

superannuated  employees,  and  an  insurance  scheme  was 
adopted,  which  proved  no  more  satisfactory.  In  1907  a 
general  superannuation  law  was  passed  to  which  employees 
contributed  a  percentage  of  their  salary,  ranging  from  5 
to  10  per  cent  according  to  age.  It  is  not  expected  that  the 
employees  shall  bear  the  entire  burden  of  their  pensions. 
The  balance  is  borne  by  the  government,  but  the  entire  cost 
was  figured  out  in  advance  and  the  fund  is  placed  on  a 
sound  actuarial  basis.  The  mistake  has  not  been  made  of 
requiring  the  younger  clerk  to  contribute  towards  the  pen- 
sion to  be  paid  to  clerks  about  to  be  retired  from  the  service. 
The  New  Zealand  plan  so  far  seems  to  be  successful. 

CANADA 

The  experience  of  our  nearest  neighbor,  Canada,  illus- 
trates the  difficulty  of  legislating  on  this  subject  and  shows 
the  necessity  of  starting  right.  The  Dominion  was  created 
in  1867.  The  Superannuation  Act  was  passed  in  1870. 
To  some  extent  is  was  a  straight  pension  system.  Clerks 
receiving  over  $600  contributed  4  per  cent  of  their  salaries 
to  a  common  fund,  while  on  smaller  salaries  the  rate  was 
2  1-2  per  cent.  In  1873  these  reductions  were  reduced 
and  the  contributions  made  by  the  clerks  were  inadequate 
and  inequitable,  and  the  government  paid  the  deficit. 
No  return  was  made  of  even  these  small  contributions  to 
employees  in  case  of  death  or  resignation.  Complaint  was 
made  that  this  pension  system  was  grossly  abused  for  party 
purposes.  It  became  a  party  question  and  is  said  to  have 
contributed  largely  to  the  success  of  the  party  which  has  just 
gone  out  of  power.  The  present  Canadian  plan  is  a  flat  rate 
assessment  of  5  per  cent  on  all  salaries,  and  each  man  gets 
back  what  he  pays  in  together  with  4  per  cent  interest, 
which  is  not  sufficient  to  provide  an  adequate  annuity. 

EUROPEAN  PENSION  SYSTEMS 

It  is  not  easy  to  give  a  brief  symposium  of  the  civil  pen- 
sion systems  of  European  countries.     Some  of  them  require 


«5 

contributions  from  employees,  but  the  majority  do  not. 
The  pensions  paid  range  from  the  whole  of  the  salary  at  the 
time  of  retirement  to  one-half,  but  a  fair  average  might  be 
stated  to  be  1-60  of  the  salary  at  date  of  retirement  for 
each  year  of  service  not  to  exceed  forty  years,  which  would 
make  the  pension  two-thirds  of  the  active  pay.  Pensions 
are  generally  paid  for  disability  after  ten  years'  service, 
but  the  pension  is  almost  invariably  dependent  upon  the 
length  of  service. 

CIVIL  PENSIONS  IN  THE  UNITED  STATES 

Civil  pensions  in  the  United  States  are  not  even  now  very 
common,  and  the  systems  in  existence  are  of  comparatively 
recent  birth.  They  may  be  divided  generally  into  munici- 
pal pensions,  pensions  paid  by  industrial  corporations,  rail- 
road pensions  and  labor  organization  pensions. 

TEACHERS'  PENSIONS. 

Municipal  pensions  are  of  three  kinds — those  paid  school 
teachers,  and  police  and  firemen  pension  funds.  Less  than 
two  years  ago  the  Bureau  of  Labor  collected  statistics  as 
to  teachers'  pension  systems  in  the  United  States,  and 
the  report  was  published  as  a  Senate  Document.  Figures 
were  given  of  46  separate  pension  funds,  including  21  States 
and  the  District  of  Columbia,  scattered  fairly  well  through 
all  sections  of  the  country.  Six  States  pension  all  their 
public  school  teachers.  Very  few  of  these  systems  are 
more  than  20  years  old,  and  the  great  majority  have  not 
been  in  operation  long  enough  to  prove  whether  they  will 
stand  the  test  of  time.  The  many  changes  that  have  al- 
ready been  made  show  that  the  system  has  not  yet  passed 
the  experimental  stage.  In  85  per  cent  of  the  funds 
the  teachers  pay  the  entire  expense  or  contribute  to  a  fund 
maintained  by  the  municipality  or  State  in  which  they  teach. 
The  pensions  paid  are  as  a  rule  very  modest  and  provide 


26  ^ 

only  for  a  bare  subsistance.  These  pensions  average  some- 
what over  $400  a  year.  Most  of  the  systems  pay  a  pension  for 
service,  ranging  from  25  to  35  years,  and  also  a  pension  for 
incapacity  or  disability  after  teaching  a  smaller  term  of  years. 
The  systems  which  compel  contributions  from  the  teachers 
and  those  which  do  not  are  about  equally  divided.  With 
few  exceptions  where  teachers  do  contribute  to  the  fund  a 
refund  is  made  where  the  teacher  leaves  the  service  before 
reaching  the  age  for  retirement.  The  most  common  type 
of  teachers'  pensions  is  one  in  which  the  teacher  contributes 
a  small  amount,  between  one  and  two  per  cent  of  the  annual 
salary  for  about  30  years,  the  State  or  city  contributing  the 
balance. 

The  arguments  in  favor  of  teachers'  pensions  have  been 
set  forth  as  follows : 

1.  Nearly  all  advanced  European  countries  have  adopted 
such  a  system  and  find  it  works  to  the  great  advantage  of 
the  community  where  it  operates. 

2.  A  few  American  universities  have  established  funds 
for  pensioning  aged  professors,  and  Andrew  Carnegie 
has  given  a  fund  of  10  million  dollars,  the  income  of  which 
is  used  to  pay  pensions  to  college  professors  who  have  served 
the  required  number  of  years  in  colleges  and  universities  of 
accepted  standing.  As  a  rule  professors  in  foreign  uni- 
versities who  have  been  invited  to  the  United  States  to 
teach  prefer  a  smaller  salary  abroad  with  the  assurance  of 
a  pension  to  provide  for  their  declining  years  than  a  higher 
salary  here  without  such  pension. 

3.  A  pension  system  secures  a  longer  tenure  of  office  for 
teachers. 

4.  Disabled  teachers  are  weeded  out,  and  better  talent  is 
secured  when  old  age  is  provided  for  in  this  way. 


5.  Under  a  pension  system  teachers  would  have  compara- 
tive freedom  from  business  cares  and  could  render  better 
service  to  the  schools. 

6.  Teachers  too  old  to  serve  continuously  could  be  called 
on  to  assist  in  some  kind  of  work  or  could  serve  as  sub- 
stitutes. 

7.  Pensions  will  enhance  the  dignity,  attractiveness  and 
efficiency  of  the  public  school  service.  Schools  will  be  better 
taught  and  it  will  be  more  economical  in  the  long  run. 

8.  Private  corporations  find  it  more  profitable  to  pension 
their  employees,  and  it  should  be  as  possible  to  pension  pub- 
lic servants  who  perform  the  important  function  of  training 
the  youth  of  the  land. 

POLICE  AND  FIREMEN'S  PENSIONS 

There  are  86  cities  in  the  United  States  that  provide  pen- 
sions for  firemen  and  81  cities  that  pension  their  policemen 
who  have  seen  a  certain  number  of  years  service  or  who 
have  become  incapacitated  in  the  line  of  duty.  The 
majority  of  these  funds  are  not  over  12  years  old.  New 
York  was  the  pioneer,  having  established  a  police  pension 
fund  in  1857  and  a  fund  for  its  firemen  in  1871.  These  two 
classes  of  civil  employees  seem  to  be  peculiarly  entitled  to 
the  benefits  of  a  retirement  system.  They  are  the  guar- 
dians of  the  life  and  property  of  the  community  they  serve ; 
their  occupations  are  extra-hazardous  and  they  constantly 
face  the  danger  of  being  disabled  or  killed  in  the  performance 
of  their  duty.  Their  years  of  service  average  much  less 
than  that  of  persons  performing  clerical  or  office  work.  The 
number  of  years  service  necessary  to  entitle  them  to  pension 
is  therefore  comparatively  low,  ranging  from  15  to  25  years. 
In  a  majority  of  cases  the  cities  appropriate  whatever 
money  is  necessary  to  pay  these  pensions.  Sometimes  a 
direct  levy  is  made,  and  sometimes  a  certain  portion  of  the 
municipal  revenue  is  set  aside  for  the  purpose.     The  cases 


28 

where  the  cities  pay  nothing  toward  the  purposes  of  these 
funds  can  be  counted  on  the  fingers  of  two  hands.  The 
police  and  firemen  almost  invariably  contribute  towards 
their  own  pensions,  commonly  one  per  cent  of  their  salary, 
although  the  amount  varies  considerably.  The  annuity  paid 
is  commonly  one-half  of  what  they  receive  at  time  of  re- 
tirement. 

The  muncipal  pension  system  is  a  distinct  step  forward. 
Cities  are  awakening  to  the  fact  that  it  pays  to  treat  their 
public  servants  well.  The  cities  that  have  pensioned  their 
employees  enjoy  a  more  stable  and  efficient  service.  The  men 
in  the  fire  department  and  in  the  public  service  when  their 
future  is  secure  are  not  all  the  time  looking  for  something 
better  to  do.  Men  will  be  more  careful  of  their  official  con- 
duct when  they  know  that  they  are  liable  to  be  discharged 
for  disobedience  or  inefficiency  and  thereby  lose  their  chance 
for  a  pension. 

Teachers,  firemen  and  policemen  have  their  benefit  asso- 
ciations and  relief  funds,  and  the  pension  system  is  but  a 
step  in  advance.  Portions  of  present  pension  funds  have 
come  from  accumulations  of  these  various  associations. 
The  men  still  contribute  in  most  cases.  The  deductions  from 
salary  remove  the  objection  often  raised  that  a  pension  tends 
to  make  the  recipient  lose  his  self-respect.  Instead  of  that 
he  feels  he  is  getting  only  what  he  deserves. 

The  policy  of  municipal  pensions  has  on  the  whole  worked 
well.  The  principle  is  sound,  and  the  administrative  errors 
can  be  corrected.  By  no  possibility  could  private  enterprise 
provide  such  security  at  similar  cost  in  such  hazardous  occu- 
pations as  the  police  and  fire  departments,  and  to  leave  it 
to  the  slow  and  uncertain  chance  of  personal  savings  would 
be  to  throw  the  majority  of  incapacitated  and  worn  out  em- 
ployees back  on  the  public  or  private  charity.  Such  an  out- 
come would  be  a  disgrace  to  the  community. 

The  nation  approves  our  system  of  military  pensions  which 
has  continued  for  over  a  century  and  stands  ready  to  approve 
an  adequate  and  well-digested  system  of  civil  pensions  for 
public  and  private  employment. 


29 

WORKMEN'S  INSURANCE  AND  BENEFIT  FUNDS. 

The  23rd  annual  report  of  the  Commissioner  of  Labor  is 
entitled  "Workmen's  Insurance  and  Benefit  Funds  in  the 
United  States."  It  records  the  remarkable  growth  in  the 
United  States  in  the  last  quarter  of  a  century  in  the  appli- 
cation of  the  principle  of  insurance  for  the  protection  of 
workmen  as  a  distinct  class  against  sickness,  accident,  death, 
old  age  or  other  adversity.  The  field  is  covered  in  part  only 
by  the  regular  insurance  companies,  though  many  old  line 
companies  now  sell  insurance  against  sickness  as  freely  as 
they  do  against  death  and  accident.  Mutual  benefit  asso- 
ciations pay  out  millions  annually  in  life  and  health  in- 
surance benefits.  This  report,  however,  is  confined  to  a 
study  of  various  schemes  of  insurance  designed  for  the 
benefit  of  wage  earners  and  persons  on  small  salaries, 
and  the  benefits  paid  in  each  case  were  usually  comparatively 
small. 

About  twelve  funds  were  investigated,  most  of  which  are 
maintained  by  labor  organizations.  Some  of  them  limit 
their  membership  to  the  employees  of  a  particular  establish- 
ment. Reports  were  obtained  concerning  fifty  railroad 
funds.  The  two  principal  classes  of  benefits  paid  are  for 
death  and  temporary  disability.     It  is  said  that: 

"Only  a  small  percentage  of  the  funds  pay  superannua- 
tion benefits ;  that  is,  benefits  to  members  who  have  passed 
a  prescribed  age.  This  kind  of  insurance  has  not  made 
much  progress  in  the  United  States,  although  it  seems  to 
be  meeting  with  some  favor  in  recent  years.  The  principal 
funds  making  such  provision  are  the  railroad  pension  funds. 
The  national  labor  organizations  are  also  introducing  this 
feature.  In  the  funds  paying  this  kind  of  benefits,  super- 
annuation is  not  always  clearly  diflFerentiated  from  disability 
incident  to  old  age  and  the  benefit  is  paid  under  circum- 
stances blending  these  two  factors.  Length  of  service  is 
an  element  entering  into  the  superannuation  benefits.  Two 
motives  appear  to  actuate  in  the  introduction  of  this  form  of 


30 

benefit  or  insurance.  First,  philanthropy,  and  second,  a  de- 
sire on  the  part  of  labor  organizations  to  hold  their  members, 
and  of  employers  to  keep  their  employees  permanently  in 
their  employ." 

The  letter  carriers  of  the  United  States  have  a  mutual 
benefit  association  now  twenty  years  old,  composed  of  mem- 
bers of  the  National  Association  of  Letter  Carriers  and  sub- 
ject to  the  supervision  of  that  body,  which  pays  death  bene- 
fits not  in  excess  of  $3,000,  on  monthly  assessments  ranging 
from  $2.31  at  the  age  of  21  years  to  $5.49  at  the  age  of  50. 
These  rates  were  adopted  in  1906,  superseding  the  previous 
schedule  which  had  proved  inadequate.  In  the  fiscal  year 
1908,  63  claims  were  paid,  aggregating  $156,252.17 

The  letter  carriers  also  maintain  a  separate  and  distinct 
retirement  association,  organized  in  1902,  which  provides  a 
scheme  of  annuity  and  disability  payments  and  members  may 
belong  to  either  class,  or  to  both.  An  annuity  member  who 
withdraws  is  repaid  what  he  has  paid  in  as  premiums  with 
interest  at  4  per  cent  per  annum  upon  the  surrender  of  his 
certificate.  If  in  arrears  for  four  monhts  he  is  treated  as 
if  he  had  withdrawn.  Annuity  certificates  are  issued  in 
sums  of  $100,  $200,  $300,  $400  and  $500.  The  premium 
rates  are  determined  by  the  age  at  the  time  of  taking  out 
a  certificate  and  by  the  age  at  which  the  annuity  is  to  be 
given.  The  minimum  age  for  entering  is  20  years  and  the 
maximum  is  65.  Annuities  may  be  purchased  to  begin  at 
the  age  of  30  years,  or  any  five  year  period  between  that 
age  and  the  age  of  70,  and  payments  continue  thereafter 
for  the  balance  of  the  life  of  the  member.  The  disability 
benefit  payment  is  $8.00  a  week,  limited  to  twenty  weeks 
in  any  one  year.  Members  may  borrow  money  on  their 
certificates.  If  the  earnings  of  the  retirement  fund  exceed 
4  per  cent  per  annum  the  surplus  is  apportioned  among 
the  annuity  members. 

The  International  Association  of  Machinists,  with  head- 
quarters in  Washington,  D.  C,  established  a  superannuation 
fund  to  be  computed  from  June  i,  1903.     Ten  years'  ser- 


31 

vice  thereafter  will  entitle  a  member  to  a  superannuation 
benefit  of  $500  on  reaching  the  age  of  65  years,  and  after 
20  years'  service  to  the  payment  of  $1,000  on  attaining  the 
age  of  68  years.  A  fund  is  now  being  collected  to  insure 
these  payments  which  will  not  be  payable  until  191 3  and 
1923  respectively. 

The  Pattern  Makers  League  of  North  America  has 
adopted  a  superannuation  benefit  which  will  be  operative 
in  1920.  Members  60  years  of  age  after  25  years*  member- 
ship will  be  paid  $12.00  a  month,  and  members  65  years  of 
age  after  30  years'  membership  will  be  paid  a  superannua- 
tion benefit  of  $16.00  a  month. 

The  United  Association  of  Journeymen  Plumbers,  Gas- 
fitters,  Steam-fitters  and  Steam-fitters*  Helpers  of  the 
United  States  and  Canada  has  adopted  a  superannuation 
benefit  to  members  of  not  less  than  45  years  of  age,  the 
amount  being  governed  by  the  length  of  membership  in 
the  association.  To  those  of  the  highest  class  member- 
ship of  30  years  and  over  $500  will  be  paid ;  to  the  second 
class  membership  of  25  years  and  under  30  years,  $400; 
to  the  third  class  membership  of  20  years  and  under  25 
years,  $300.  To  be  entitled  to  this  superannuation  benefit 
a  member  must  be  totally  incapacitated  by  old  age  or  infirm- 
ity from  following  his  trade.  This  benefit  is  not  yet  oper- 
ative. 

The  Amalgamated  Association  of  Street  and  Electric 
Railway  Employees  of  America  is  accumulating  funds  for 
the  purpose  of  carrying  out  the  provisions  of  a  superannu- 
ation pension  system  not  yet  in  operation.  It  is  proposed  to 
pay  small  pensions  to  members  who  have  reached  the  age 
of  65  years  or  more  and  are  prevented  because  of  age  from 
following  their  occupation  as  street  and  electric  railway 
employees.  For  mebers  in  continuous  good  standing  be- 
tween seven  and  ten  years  the  benefit  will  be  $1.00  a  week. 
For  members  whose  service  has  been  between  ten  and  fif- 
teen years  $1.50  a  week;  between  15  and  20  years  $2.00  a 
week ;  for  service  25  years  or  more  $3.00  a  week. 

The  International  Typographical  Union  began  the  pay- 


'.V 

ment  of  old  age  pensions  in  August,  1908.  The  sum  of 
$4.00  per  week  is  paid  any  member  of  the  Union  on 
reaching  the  age  of  60,  who  has  been  in  continuous 
good  standing  in  the  Union  20  years  and  finds  it  impossible 
to  secure  sustaining  employment.  The  German-American 
Typographia,  composed  of  printers  of  the  German  language 
and  a  part  of  the  International  Typographical  Union,  pays 
an  old  age  pension  of  $2.00  per  week  in  addition  to  that 
paid  by  the  International  Typographical  Union. 

As  far  back  as  1857  The  International  Typographical 
Union  had  under  consideration  an  asylum  for  superannuated 
and  indigent  printers.  The  project  long  considered  cul- 
minated in  the  Union  Printers'  Home  at  Colorado  Springs, 
Colorado,  opened  in  1892.  For  the  year  ended  May  21, 
1907,  the  average  number  of  inmates  was  143,  and  the  total 
expenditure  for  the  year  was  $66,267.72,  and  the  total  re- 
ceipts and  disbursements  from  June,  1886,  to  May  31,  1907, 
were  $687,353.99,  leaving  a  balance  on  hand  of  $3,569.72. 

Of  461  benefit  funds  maintained  in  industrial  establish- 
ments only  five  provide  for  superannuation  benefits,  of  which 
three  are  pension  funds  maintained  entirely  by  the  com- 
pany and  two  are  supported  jointly  by  the  company  and 
the  employees.  The  age  of  eligibility  to  these  benefits  is 
either  65  or  70  years,  and  generally  25  years  service  is  re- 
quired. One  establishment  pays  a  superannuation  benefit 
of  $500  in  a  lump  sum,  the  others  make  monthly  payments 
for  life;  in  one  case  $10.00  per  month;  in  another  from 
$15  to  $25  per  month,  dependent  upon  the  average  monthly 
wages  for  ten  years  next  preceding  retirement,  and  in  an- 
other case  $6.00  per  week. 

ANNUITIES  PAID  BY  INDUSTRIAL  CORPORA- 
TIONS 

It  is  impossible  to  give  anywhere  near  complete  statis- 
tics as  to  superannuation  allowances  paid  by  industrial 
corporations  in  the  United  States.  Most  of  the  largest  cor- 
porations  such  as  the  United  States  Steel  Company,  the 


33 

International  Harvester  Company  and  the  Standard  Oil 
Company,  have  for  years  made  provisions  for  their  em- 
ployees who  have  grown  old  in  the  service.  Sometimes  it 
is  done  by  giving  a  faithful  employee  merely  nominal  work 
to  perform.  This  practice  on  the  part  of  large  corporations 
is  growing.  Some  banks  and  some  insurance  companies 
make  provision  for  the  last  years  of  old  and  faithful  em- 
ployees who  are  no  longer  able  to  take  care  of  themselves. 

In  1 90 1  Mr.  Andrew  Carnegie  created  an  endowment 
fund  of  four  million  dollars,  the  income  of  which  was  to 
be  used  to  pay  accident  and  death  benefits  and  pension  al- 
lowances for  employees  of  the  Carnegie  Steel  Company 
and  its  constituent  companies.  Pensions  are  paid  for  in- 
capacity at  the  age  of  60  years  after  15  years  continuous 
service.  The  pension  allowance  is  one  per  cent  of  the  aver- 
age annual  pay  for  each  year  of  service.  In  the  year  1908 
$81,093  were  paid  in  pensions  to  555  persons. 

Judge  Elbert  H.  Gary,  executive  head  of  the  Steel  trust, 
in  a  statement  made  on  the  15th  of  December,  191 1,  said: 

"We  have  established  a  pension  fund  out  of  our  own  earn- 
ings of  $8,000,000.  With  the  $10,000,000  pension  fund 
subscribed  by  Andrew  Carnegie,  our  total  pension  fund  is 
$18,000,000.  From  the  earnings  of  this  fund  we  are  main- 
taining a  pension  roll  which  would  surprise  the  country 
were  the  number  of  beneficiaries  mentioned. 

"Besides  this  pension  fund,  we  have  an  annual  voluntary 
aid  fund  of  more  than  $1,000,000.  This  money  is  contrib- 
uted to  the  support  of  workmen  injured  in  our  employ  and 
to  dependent  families  in  case  of  the  death  of  their  bread- 
winners. We  make  no  legal  quibbles  in  the  distribution  of 
this  voluntary  aid  fund.  Not  a  cent  of  it  comes  from  the 
wages  of  our  employees.  It  is  paid  out  without  stint  or 
threat  of  resorting  to  lawsuits  to  determine  judicially  the 
merit  of  the  claim  that  may  be  presented.'* 

The  Western  Electric  Company,  employing  7,000  people, 
instituted  a  pension  system  in  1906,  and  set  aside  the  sum 
of  $400,000  as  a  permanent  endowment.  An  additional 
3 


34 

allowance  of  $150,000  for  the  use  of  the  fund  has  been  pro- 
vided. Employees  may  be  pensioned  at  the  age  of  60 
after  20  years'  service.  Pensions  are  paid  for  total 
incapacity  after  10  years'  service  but  the  rate  is  determined 
by  the  Pension  Board  in  each  individual  case.  The  cash  on 
hand  in  the  fund  Nov.  30,  1907,  was  $576,598.64,  and  the 
pensions  paid  for  that  fiscal  year  were  $2,400  to  one  high- 
salaried  engineer  permanently  disabled,  and  $2,004.87  to 
eighteen  persons  in  superannuation  benefits. 

The  First  National  Bank  of  Chicago  has  maintained  a 
pension  fund  since  1889.  As  a  general  rule  an  employee  or 
officer  must  have  served  not  less  than  15  years  and  have  at- 
tained the  age  of  60  years.  Retirement  is  permissible  at 
60,  and  compulsory  at  65,  unless  for  special  reasons  the 
bank  desires  to  continue  him  in  the  service  and  he  consents. 
Provision  is  made  for  pensions  to  widows  who  are  entitled 
to  receive  one-half  the  husband's  pension. 

Pensions  are  also  paid  minor  children  under  the  age  of  18 
years.  Members  of  the  fund  contribute  3  per  cent  of  their 
salaries  monthly.  The  pension  allowance  is  one-fiftieth 
of  the  salary  for  each  year  of  service  at  date  of  super- 
annuation but  in  no  case  more  than  thirty-five-fiftieths  of 
the  salary.  High-salaried  officers  are  pensioned  at  a  low 
rate,  ranging  between  one-third  and  two-fifths.  The  num- 
ber of  persons  enjoying  the  fund  April  21,  1907,  was  503, 
and  the  receipts  and  disbursements  for  the  fund  for  that 
fiscal  year  were  about  $100,000,  of  which  two-thirds  was 
invested  and  $9,500  was  paid  out  for  superannuation  bene- 
fits. 

One  of  the  latest  additions  to  the  list  of  large  private  cor- 
porations which  pension  their  employees  is  Armour  &  Co., 
the  meat  packers.  They  instituted  such  a  plan  November 
I,  191 1,  and  set  aside  one  million  dollars  for  its  support. 
Twenty  years'  service  is  required  and  employees  may  be 
retired  on  application  at  the  discretion  of  the  trustees  at 
the  age  of  57,  are  entitled  to  be  retired  at  the  age  of  60, 
and  must  retire  at  65.    Women  may  be  retired  at  the  age  of 


35 

5o  after  twenty  years'  service.  Employees  may  be  retired 
after  15  years'  service  if  incapacitated  by  sickness  or  in- 
jury. Provision  is  also  made  for  the  widows  and  minor 
children  of  deceased  employees. 

The  pension  paid  is  2  per  cent  of  the  salary  which  was 
paid  at  time  of  retirement  for  each  year  of  service-  That 
is,  after  25  years  of  service  the  employee  will  receive  50 
per  cent  of  the  salary  paid  him  at  the  time  he  retired. 
Ejnployees  contribute  to  the  fund  3  per  cent  of  their  sal- 
aries annually.  If  in  any  case  employees  die  or  leave  the 
employment  before  a  pension  has  been  earned,  the  contri- 
butions already  made  are  returned  to  the  employee  or  paid 
to  his  widow  or  minor  children. 

Stockholders  of  the  American  Sugar  Refining  Company 
will  be  called  upon  at  the  next  annual  meeting  to  approve 
a  plan  to  provide  pensions  to  the  company's  7,500  officers 
and  employees.  Directors  of  the  company,  it  has  been  an- 
nounced, have  worked  out  details  of  the  plan,  which  in- 
cludes the  retirement  of  employees  over  65  years  of  age 
or  after  30  years  of  service.  In  case  of  women  the  age 
limit  is  set  at  60  and  the  term  of  service  at  25  years.  An 
appropriation  of  $300,000  is  suggested  as  the  nucleus  of 
the  pension  fund.  No  pension,  under  the  proposed  plan, 
will  be  less  than  $20  a  month,  and  none  will  exceed  $5,000 
a  year.  The  amou'it  of  the  pension  will  be  "a  sum  annu- 
ally equivalent  to  I  per  cent  of  the  average  annual  wage 
or  salary  during  the  ten  years  preceding  retirement  multi- 
plied by  the  years  of  service." 

RAILROAD  PENSIONS 

Among  employees  of  labor,  the  railroads  of  the  United 
States  have  been  the  pioneers  in  the  adoption  of  retirement 
and  pension  systems  for  the  benefit  of  superannuated  em- 
ployees. They  are  today  paying  out  more  money  for  pen- 
sions and  are  making  provisk>ns  present  and  prospective  for 
a  larger  number  of  employees  than  any  other  class  of  lalxM* 


36 

employers.  The  Grand  Trunk  railroad  adopted  a  pension 
system  in  1874,  and  the  Baltimore  &  Ohio  in  1888,  but  the 
condition  of  obtaining  relief  was  membership  in  the  rail- 
road relief  department  and  the  payment  of  certain  as- 
sessments thereto.  The  Pennsylvania  Company  was  the 
first  to  inaugurate  a  pension  scheme  which  did  not  rest  in 
part  upon  contributions  by  the  employees.  Its  plan  was  put 
into  operation  in  the  year  1899.  Other  railroads  have  fol- 
lowed this  example  until  today  some  25  transportation  com- 
panies, including  the  largest  railroad  systems  in  the  coun- 
try, provide  for  the  comfort  of  employees  who  have  grown 
old  or  become  disabled  in  the  service  of  the  company. 
These  various  railroad  pension  systems  have  more  points 
of  resemblance  than  of  difference.  They  generally  fix  an 
age  of  compulsory  retirement  and  also  an  age  of  voluntary 
retirement-  In  all  cases  a  certain  number  of  years  service 
is  required.  In  nearly  every  case  the  age  of  compulsory 
retirement  is  70  years.  The  age  limit  for  entering  the 
service  ranges  from  35  to  45  years,  previous  railroad  ex- 
perience being  generally  required  in  such  cases.  The 
amount  of  pension  paid  is  based  on  salary  or  wages  and 
length  of  service,  and  ranges  from  $20  to  $150  a  month. 
The  transportation  companies  pensioning  their  men  employ 
close  to  a  million  persons  and  pay  out  annually  nearly 
three  million  dollars  to  some  7,000  old  and  disabled  em- 
ployees. 

Most  American  railway  systems  have  operated  a  pension 
system  for  a  term  of  years  ranging  from  two  to  ten  years, 
and  the  practical  operation  of  these  systems  have  worked 
for  efficiency  and  economy  and  have  the  cordial  endorse- 
ment of  the  railroad  officials  and  the  men. 

The  Employees  Provident  Fund  of  the  Intercolonial  and 
Prince  Edward  Island  Railways  of  Canada  is  worthy  of 
special  attention  because  these  railroads  are  owned  and  op- 
erated by  the  Dominion  government.  The  fund,  which 
went  into  effect  April  i,  1907,  was  authorized  by  the 
act     of     the     Dominion     Parliament,     and     is     created 


37 

by  the  monthly  contributions  of  one  and  a  half  per 
cent  of  the  regular  monthly  salary  or  wages  of  each 
employee,  to  which  the  government  adds  out  of  the  gross 
earnings  of  the  railways  an  amount  at  least  equal.  The 
government  pays  three  per  cent  interest  on  the  fund,  which 
is  controlled  and  disbursed  by  a  Board  of  five  men  com- 
posed of  the  general  manager,  two  other  railway  officials 
named  by  the  Cabinet  Minister  in  charge  of  railways,  and 
two  elected  annually  by  the  employees  contributing  to  the 
fund.  To  be  entitled  to  a  pension,  employees  must  have 
served  15  years  or  been  permanently  disabled  in  line  of 
duty.  They  must  retire  at  70  and  may  retire  at  60.  The 
allowance  paid  is  one  and  a  half  per  cent  of  the  average 
monthly  pay  received  the  past  eight  years,  multiplied 
by  the  years  of  service,  and  is  not  to  be  less  than  $2aoo 
per  month  or  more  than  two-thirds  said  average  salary. 
Contribuutions  are  refunded  when  a  pension  is  not  earned. 

The  4th  annual  report  for  the  year  ending  March  31,  191 1, 
shows  the  balance  in  the  fund  had  increased  in  one  year 
from  $255,585.08  to  $273,480.01.  The  contributions  made 
by  the  employees  during  the  year  amounted  to  $71,296.42, 
and  the  company  paid  an  equal  sum.  There  was  paid  out 
for  retiring  allowances  $121,014.34,  and  the  total  expendi- 
ture, including  contributions  refunded,  was  $132,861.10. 
In  the  four  years  the  amount  contributed  to  the  fund  av- 
eraged about  $150,000  a  year,  the  amount  paid  for  retir- 
ing allowances  had  increased  from  $23,913.04  the  first  year 
to  $121,014.24  the  fourth  year,  and  the  average  monthly 
allowance  had  increased  steadily  from  $2549  to  $26:56. 

The  report  of  the  pension  department  of  the  Canadian  Pa- 
cific Railway  for  the  year  ending  June  30,  191 1,  shows  $134,- 
876.92  paid  in  pension  allowances  for  the  year  to  492  em- 
ployees The  pension  fund  at  that  time  amounted  to  $670,- 
407.46,  not  one  dollar  of  which  had  been  contributed  by 
the  employees  of  the  company.  The  pensions  paid  are  one 
per  cent  of  the  average  salary  for  the  past  ten  years  for 
each  year  of  service,  but  not  less  than  $20  a  month.    The 


38 

object  of  the  pension  system  as  set  forth  when  it  was 
adopted  was  to  build  up  among  the  employees  a  feeling  of 
permanency  in  their  employment,  an  enlarged  interest  in 
the  company's  welfare  and  a  desire  to  remain  in  and  to 
devote  their  best  efforts  to  the  company's  service.  All  of 
these  ends,  the  company  believes,  have  been  accomplished 
by  its  pension  system. 

The  Pennsylvania  Railroad  company  was  the  first  Amer- 
ican road  to  establish  a  non-contributory  pension  system, 
and  its  disbursements  for  pensions  have  always  been  larger 
than  those  made  by  any  other  company.  At  the  annual 
meeting  of  the  stockholders  for  the  year  191 1,  an  increase 
in  the  annual  expenditure  theretofore  authorized  for  the 
payment  of  pension  allowances  from  $500,000  to  $700,000 
was  approved,  as  was  also  expenditure  of  $25,247.10  in 
addition  to  the  $500,000  already  authorized  for  the  payment 
of  pension  allowances  for  the  year  1910.  The  Pennsyl- 
vania Railroad  company  and  four  other  companies  associ- 
ated with  it  disbursed  for  pensions  in  the  year  ending  De- 
cember 31,  1910,  the  sum  of  $660,687.24-  The  number  of 
pensioners  on  their  rolls  January  i,  19 10,  was  2,320,  the 
255  pensioned  for  disability.  Duuring  the  year  88  died, 
245,  leaving  the  number  of  pensioners  December  31,  19 10, 
at  2,503.  The  oldest  pensioner  on  the  rolls  was  93  years  of 
age.  Among  those  retired  during  the  year  was  the  com- 
pany's first  Vice-President,  after  a  service  of  over  51  years. 

The  Delaware,  Lackawanna  &  Western  Railroad  com- 
pany adopted  its  pension  system  in  1902  and  stipulated  that 
the  annual  disbursements  of  the  company  should  not  ex- 
ceed $50,000.  Like  some  other  companies  this  road  found 
that  its  first  estimate  was  inadequate.  The  pension  appro- 
priated for  the  year  1910  was  $85,000  and  the  payments 
amounted  to  $80,580.15.  The  number  added  to  the  pension 
rolls  was  51,  the  number  who  died  26^  and  the  number  re- 
maining on  the  roll  December  31,  19 10,  was  292. 

The  New  York  Central  lines,  which  include  besides  the  New 


39 

York  Central  itself,  the  Lake  Shore  &  Michigan  Southern, 
the  Michigan  Central,  the  Big  Four,  and  two  other  lines, 
carried  on  their  rolls  895  employees  pensioned  for  age,  and 
255  pensioned  for  disability.  During  the  year  88  died, 
and  the  total  number  of  pensioners  at  the  end  of  the  year 
was  1,072.  The  average  age  ranged  from  74  years  and 
three  months  to  72  years  and  nine  months-  The  amount 
set  aside  by  these  companies  for  pensions  for  the  entire 
year  aggregated  $449,000,  out  of  which  there  was  actually 
paid  $286,530.97.  The  average  monthly  allowance  on  the 
Trunk  lines  ranged  from  $17  23  on  the  Big  Four  to  $26.07 
on  the  New  York  Central. 

The  Atchison,  Topeka  &  Santa  Fe  Railroad  system  re- 
ports as  follows : 

"Our  pension  system  is  a  very  liberal  one  and  well  re- 
ceived by  our  employees,  and  we  believe  it  has  produced 
loyalty  and  increased  efficiency  in  our  force.  While  this 
is  our  opinion,  in  the  nature  of  things  it  will  be  impossible 
to  compare  very  definitely  the  sums  expended  for  pensions 
with  the  increased  efficiency  of  our  employees." 

The  statement  of  the  operation  of  this  pension  system 
since  its  introduction  follows: 

The  number  of  pensioners  on  the  rolls  June  30,  191 1,  203. 

Pensions  paid  6  months  ending  June  30,  1907,  $958.10. 

Pensions  paid  fiscal  year  ending  June  30,  1908,  $16,222.73. 

Pensions  paid  fiscal  year  ending  June  30,  1909,  $30504.34. 

Pensions  paid  fiscal  year  ending  June  30,  1910,  $42,861.52. 

Pensions  paid  fiscal  year  ending  June  30, 191 1,  $51,864.87. 

Number  minimum  pensioners  on  rolls  June  30,  191 1,  I43- 

Total  June,  191 1,  rolls,  $4,648.50. 

The  president  of  the  Illinois  Central  Railroad  Company 
in  answer  to  an  inquiry  said  that  since  the  inauguration  of 
its  pension  system  on  July  i,  1901  there  have  been  paid 
out  in  pensions  to  June  30,  191 1,  approximately  $512,000. 
There  have  been  534  pensioned  during  this  time,  170  of 
whom  have  died,  leaving  364  living  pensioners.  In  con- 
clusion he  says : 


40 

"We  feel  that  the  system  has  worked  to  our  advantage 
by  the  reason  of  getting  younger  men  into  the  service, 
thereby  increasing  its  efficiency,  and  that  the  result  has  fully 
warranted  the  original  outlay  and  the  amount  expended 
in  connection  with  the  work  of  the  department  smce  its 
inauguration.  We  feel  that  it  promotes  loyalty  on  the  part 
of  our  employees  with  all  the  attendant  benefits,  and  it  is 
of  course  gratifying  to  the  management  to  be  in  a  position  to 
retire  superannuated  employees,  and  to  know  that  their 
pensions  will  be  sufficient  to  provide  for  the  few  years  left 
them." 

The  pension  system  of  the  Union  Pacific  went  into  ef- 
fect January  i,  1902.  For  the  year  ended  June  30,  191 1, 
there  were  carried  on  the  pension  rolls  226,  and  the  pay- 
ments to  them  for  the  year  amounted  to  $70,92603.  The 
Chairman  of  the  Executive  Committee  writes: 

"There  is  nothing  notable  in  our  experience  with  the  pen- 
sion system  department.  It  was  designed  to  keep  active  and 
capable  men  in  the  service  without  dismissing  those  who 
have  in  long  service  become  incapacitated  by  age  or  illness ; 
but  to  make  the  burden  on  the  company  bearable  and  as  a 
matter  of  justice  and  fairness,  the  benefit  is  limited  to  those 
who  at  the  time  have  been  at  least  20  years  continuously 
in  the  service.  The  pension  system  seems  to  be  accom- 
plishing the  purpose  stated.  The  company  bears  the  entire 
expense." 

The  Southern  Pacific  company  and  the  railroads  owned 
and  operated  by  it  adopted  a  pension  system  which  took 
effect  January  i,  1903.  The  rules  first  adopted  have  been 
amended  several  times.  The  allowances  paid  are  one  per 
cent  of  the  average  regular  monthly  pay  received  for  the 
ten  years  preceding  retirement,  for  each  year's  service. 
The  company  set  aside  $100,000  at  the  beginning  as  a 
pension  fund  and  pledged  a  further  annual  payment  of 
$90,000.  This  company,  as  well  as  most  other  railroads 
that  have  adopted  a  pension  system,  prohibits  the  employ- 


41 

ment  of  persons  inexperienced  in  railroad  work  over  35 
years  of  age  and  of  experienced  persons  over  45  years  of 
age.     The  President  of  the  Southern  Pacific  writes : 

"We  have  found  our  pensioners  very  enthusiastic  sup- 
porters of  the  Southern  Pacific  Company  in  their  mingHng 
with  the  public,  and  in  my  opinion  a  great  deal  of  good  has 
been  accomplished  by  the  expressions  of  good  will  from 
these  employees  who  have  been  retired  and  placed  on  the 
pension  rolls.  It  also  has  a  tendency  to  inspire  loyalty  and 
increase  efficiency  among  the  employees  who  have  been  in 
the  service  for  a  number  of  years  and  are  looking  forward 
to  the  day  when  they  may  be  eligible  for  pension." 

The  pension  system  of  the  Rock  Island  lines  has  only 
been  in  force  since  January  1,  19 10.  For  the  year  ended 
June  30,  1911,  the  company  paid  out  in  pension  allowances 
$35»662.26,  as  against  $13,74343  the  preceding  year.  This 
company,  unlike  most  other  companies  maintaining  a  pen- 
sion system,  lias  not  set  aside  any  regular  sum  as  a  pension 
fund.  The  amount  required  is  charged  out  each  month  to 
operating  expenses.  In  announcing  the  pension  system  the 
President,  H.  U   Mudge,  said: 

"The  system  adopted  calls  for  no  contributions  from  the 
employees  themselves.  The  company  hopes  by  thus  vol- 
untarily establishing  a  system  under  which  an  income  will 
be  assured  to  those  who  after  years  of  continuous  service 
are  by  age  or  infirmity  no  longer  able  to  perform  their 
duties,  and  without  which  they  would  be  left  entirely  with- 
out means  of  support,  to  build  up  among  them  a  feeling  of 
permanency  in  their  employment,  an  enlarged  interest  in 
the  company's  welfare,  and  a  desire  to  remain  in  and  de- 
vote their  best  efforts  to  the  company's  service." 

The  pension  system  of  the  Buffalo,  Rochester  &  Pitts- 
burg Ry.  Co.  went  into  effect  July  i,  1903.  The  company 
appropriates  annually  $25,000  toward  pensions,  and  the 
pension  allowances  paid  have  increased  steadily  from 
$806.94  for  the  year  ended  June  30,  1904,  to  $14,930.58  for 
the  year  ended  June  30,  191 1.    The  number  of  pensioners 


42 

on  the  rolls  is  46,  and  the  pension  fund  now  amounts  to 
$166,482.32.  The  average  age  of  the  pensioners  is  65  years 
and  nine  months,  and  the  average  monthly  pension  is  $27.05. 
The  average  yearly  pay  of  the  men  in  the  company's  em- 
ploy is  $651,  making  the  pension  allowance  one-half  of  the 
regular  average  pay.  The  Auditor  and  Treasurer  of  this 
road  reports: 

"Whilst  it  is  very  difficult  to  say  definitely,  we  feel  that 
our  pension  plan  has  inspired  our  employees  with  feelings 
of  gratitude  and  loyalty,  and  has  been  instrumental  in  es- 
tablishing and  maintaining  closer  personal  relations  between 
the  company  and  its  employees.  Insofar  as  the  above  men- 
tioned qualities  have  been  stimulated,  the  pension  system 
has  contributed  to  secure  economy  and  efficiency  in  the  op- 
eration of  the  railroad." 

The  last  annual  report  for  the  Reading  Company  shows 
the  sum  of  $93,506.01  was  paid  out  in  pensions  for  the 
fiscal  year  ended  June  30,  191 1.  The  number  of  pensioners 
on  the  rolls  at  that  time  was  258,  of  whom  9  had  been  in 
the  company's  service  for  50  years,  and  194  were  70  years 
of  age  with  30  or  more  years'  service  each.  In  addition  to 
the  above  sum  $30,869.30  was  contributed  by  the  Philadel- 
phia and  Reading  Railway  Company  towards  the  support 
and  maintenance  of  its  relief  association,  the  membership 
of  which  is  composed  of  employees  of  the  Reading  system. 
The  pension  system  on  this  road  has  been  in  operation  since 
1902,  and  is  now  regarded  as  fully  established-  The  pay- 
ment for  pensions  in  1904,  the  first  full  year  in  which  the 
system  was  in  operation,  was  $46,190.02.  The  cost  of 
pensions  on  this  line  has  more  than  doubled  in  seven  years. 

The  Atlantic  Coast  Line  Railroad  Company  reports  of 
its  pension  system : 

'The  pension  department  was  instituted,  and  is  now  con- 
ducted upon  the  idea  that  old  men  who  have  worthily  se- 
cured the  good  will  of  the  corporation  should  be  cared  for 
when  they  are  unable  to  work." 


43 

Mr-  Louis  E.  Brandeis,  in  an  article  on  the  contributory 
pension  system  recently  adopted  by  the  officers  and  em- 
ployees of  the  Boston  &  Maine  railroad  made  the  following 
statement : 

"To  make  free  citizens  we  must  make  them  financially 
independent,  and  such  independence  is  possible  only  through 
a  comprehensive  system  of  insurance  against  sickness,  ac- 
cident, old  age  or  premature  death.  Independence  involves 
protection  against  the  loss  of  the  bare  means  of  subsistence. 
This  pension  sytem  is  under  State  supervision,  and  is  an 
important  step,  since  it  opens  the  way  for  an  extension  of 
the  co-operative  system  to  cover  accident  and  invalidity  in- 
surance. Out  of  it  may  develop  a  general  law  under  which 
other  public  service  and  private  corporations  may  put  into 
operation  a  co-operative  old-age  pension  system." 

There  are  at  least  three  street  railway  systems  that  main- 
tain a  pension  system.  The  president  of  the  Philadelphia 
Rapid  Transit  Company  reports  that  it  has  maintained  for 
the  past  two  years  a  pension  and  insurance  bureau  and 
has  placed  45  of  its  old  employees  on  the  pension  list  at  the 
rate  of  $20  a  month,  and  has  paid  out  since  January  i, 
19 ID,  $73,000  in  death  benefits. 

The  Brooklyn  Rapid  Transit  company  carries  52  of  its 
employees  on  a  retirement  roll.  Their  pensions  vary  from 
$20  to  $40.30  a  month  and  aggregate  $1,442  monthly. 

The  Metropolitan  Street  Railway  Company  maintains  a 
pension  system  and  the  employees  of  the  company  have 
a  mutual  benefit  association  which  has  paid  out  over  $468,- 
000  for  death  claims,  sick  and  injury  benefits  and  medical 
advice  and  attendance.  This  is  $93,139.29  more  than  the 
money  paid  to  the  association  by  its  members.  The  total 
on  hand  in  cash  and  investments  September  19,  191 1,  was 
$54,662.80. 

ARGUMENTS  FOR  RAILROAD  PENSIONS 

A  magazine  article  describing  the  pension  system  of  the 
Canadian  Pacific  Railroad  set  forth  the  objects  of  the  sys- 
tem as  follows: 


44 

To  build  up  among  employees  a  feeling  of  permanency 
in  their  employment  and  an  enlarged  interest  in  the  com- 
pany's welfare  and  a  desire  to  remain  in  and  to  devote 
their  best  efforts  and  intentions  to  the  company's  service. 

The  chairman  of  the  Board  of  Pensions  of  the  Illinois 
Central  railroad  declares  that  the  practicability  and  value 
of  the  pension  system  in  operation  on  that  road  cannot  be 
over-estimated.  Its  benefits  extend  alike  to  the  company 
and  its  employees.  It  is  an  incentive  to  faithful  work  and 
continued  service  on  the  part  of  employees,  draws  them 
closer  to  the  company,  inspires  loyalty  and  engenders  a 
spirit  of  co-operation  and  mutual  interest.  It  assures  em- 
ployees of  a  regard  for  them  extending  beyond  the  period 
of  their  active  duty.  They  have  a  knowledge  that  through 
the  liberality  of  the  company  provision  has  been  made  for 
their  comfort  when  failing  health  and  the  infirmities  of  age 
will  not  permit  of  their  longer  continuing  in  active  ser- 
vice. They  are  brought  to  realize  that  the  time  will  come 
when  after  long  years  of  service  and  with  declining  pow- 
ers they  must  yield  to  younger  and  more  active  men;  that 
the  course  of  progress  in  justice  to  employers  demands 
this.  Evidence  of  the  realization  of  this  fact  is  apparent 
in  many  of  the  requests  of  employees  for  retirement  wherein 
the  reason  for  such  request  is  given  as :  'T  make  this  appli- 
cation feeling  I  can  no  longer  do  justice  to  the  company  or 
to  myself."  The  pension  system  is  esteemed  and  appreciated 
not  only  by  those  enjoying  its  benefits  and  by  those  of  ad- 
vancing )^ears  who  hope  soon  to  enjoy  them,  but  by  out- 
siders who  see  the  good  being  done  and  praise  the  company 
for  making  provision  for  their  old  servants  instead  of  drop- 
ping them  when  incapacitated  through  age  without  pro- 
vision for  the  future. 

What  Germany  does  by  old  age  insurance  and  the  British 
government  by  old  age  pensions,  American  railroads  and 
many  of  its  industrial  corporations  are  accomplishing  with- 


45 

out  outside  aid.  The  cost  to  the  corporations  is  not  rela- 
tively large  and  it  is  more  than  compensated  for  in 
two  ways : 

Without  a  pension  system  railroad  officials  hesitate  to  dis- 
miss old  employees  who  have  spent  the  larger  part  of  their 
lives  in  the  service  and  to  leave  them  in  poverty.  They 
give  them  various  jobs  at  smaller  incomes  where  old  age  is 
not  a  fatal  handicap.  But  nine  out  of  ten  of  these  jobs  can 
be  done  better  by  young  men  at  smaller  salaries;  and  the 
more  old  men  are  kept  in  the  service  after  they  begin  to 
decline  in  their  efficiency,  the  poorer  the  service  becomes. 

Then,  too,  for  the  same  reason  the  advancement  of  cap- 
able men  is  slower  and  the  spirit  in  the  service  becomes 
slacker.  A  pension  system  therefore  not  only  encourages 
loyalty  and  better  work  by  making  provision  for  old  age 
dependent  directly  on  the  length  of  service,  but  it  also 
makes  sure  that  beyond  a  certain  limit  no  capable  man  will 
be  held  back  from  promotion  by  a  dead  line  of  retainers. 
The  experience  of  the  railroads  that  have  tried  such  a  plan 
shows  that  it  is  "enlightened  philanthropy"  of  the  best 
sort. 

A  committee  of  the  Board  of  Trade  of  London  recently 
made  a  report  on  the  railway  superannuation  and  pension 
fund  of  the  United  Kingdom.  The  accumulated  fund  at 
that  time  approached  eleven  million  pounds,  and  the  num- 
ber of  employees  interested  was  nearly  300,000.  The  num- 
ber of  funds  described  was  32,  of  which  13  were  for  the 
benefit  of  salaried  employees  and  17  for  wage  earners. 
There  is  great  variety  among  these  pension  systems  and 
the  committee  declared  that  uniformity  was  impracticable. 
In  many  cases  the  actuarial  soundness  of  the  fund  is  guar- 
anteed by  the  railroad  and  the  company  contributes  to  the 
fund  not  less  than  the  amounts  contributed  by  the  men. 

MASSACHUSETTS  OLD  AGE  PENSION  COM- 
MISSION 

The  Massachusetts  Commission  on  Old  Age  Pensions 
appointed  in  1907  made  its  report  in  1910,  and  rejected  all 


46  ^ 

old  age  pension  and  compulsory  State  insurance  schemes, 
for  the  following  reasons: 

(i)  Because  of  the  heavy  expense;  (2)  the  enervating 
influence  on  the  character,  especially  the  discouragement 
of  savings;  (3)  disintegrating  effect  on  the  family  in 
taking  away  the  obligation  to  support  aged  parents;  (4) 
unfavorable  effect  on  wages  which  would  inevitably  tend 
to  decline,  as  a  pension  system  would  attract  workers  to 
the  State,  thus  over-crowding  the  labor  market  and  increas- 
ing direct  competition  among  laborers;  (5)  the  indirect 
effect  of  partial  public  support,  and  (6)  the  tendency  of 
employers  to  reduce  wages  as  one  means  of  meeting  the 
greatly  increased  tax  which  would  be  levied  upon  them. 

While  the  Commission  was  opposed  to  old  age  pensions, 
it  favored  a  contributory  retirement  system  for  employees 
of  the  cities,  towns  and  counties  of  the  State,  and  in  this 
connection  stated : 

"A  non-contributory  pension  scheme  is  simply  a  counsel 
of  despair.  If  such  a  scheme  be  defensible  or  excusable 
in  this  country,  then  the  whole  economic  and  social  sys- 
tem is  a  failure.  The  adoption  of  such  a  policy  would  be 
a  confession  of  its  breakdown.  To  contend  that  it  is  nec- 
essary to  take  this  course  is  to  assume  that  members  of  the 
working  class  either  cannot  earn  enough  or  cannot  save 
enough  to  take  care  of  themselves  in  their  old  age.  If 
that  be  true,  then  American  democracy  is  in  a  state  of 
decay." 

The  Commission  also  recommended  that  corporations  pen- 
sion their  own  employees  and  that  State,  city  and  county 
establish  a  retirement  scheme  for  public  employees,  the 
reasons  being  summarized  as  follows : 

Considerations  of  economy  and  efficiency,  not  to  men- 
tion other  motives,  demand  the  establishment  of  municipal 
pension  systems.    These  considerations  are  even  more  im- 


47 

perative  in  the  case  of  the  municipality  than  in  that  of  % 
private  corporation  for  political  influences  come  into  play 
to  prevent  the  discharge  of  civic  employees  who  have  out- 
lived their  usefulness.  *  *  ♦  The  same  consideration 
that  makes  for  the  expediency  of  pensioning  municipal  em- 
ployees holds  also  in  the  case  of  other  public  employees, 
those  in  the  service  of  the  State  and  county. 

THE  SUPERANNUATED  MAN 

The  problem  of  the  superannuated  man  is  becoming  a 
very  real  one.  Men  are  now  considered  too  old  for  railroad 
work  at  45  years,  and  generally  at  35  if  they  have  not  had 
any  previous  railroad  experience.  Pennsylvania  railroad 
enforces  retirement  on  all  its  employees  from  Presi- 
dent down  at  the  age  of  70.  When  its  pension  sys- 
tem went  into  effect  it  had  nearly  eight  times  as  many  em- 
ployees who  had  served  the  company  fifty  years  as  had  the 
United  States  in  its  much  larger  civil  service. 

PENSION  NOT  DEFERRED  PAY,  BUT  DEFERRED 

BONUS 

The  argfument  is  advanced  that  a  civil  pension  is  not 
deferred  pay  but  is  a  deferred  bonus  contingent  largely 
on  length  of  service.  The  system  of  pensions  it  is 
urged  is  a  system  of  self-interested  pensions  adopted 
by  the  State  in  order  to  insure  the  fidelity  of  the 
servant  and  to  retain  him  in  the  service  a  long  pe- 
riod. Its  advantages  are  provided  at  the  cost  of  the  State 
but  it  makes  for  efficiency  in  the  public  service,  in  that  it 
renders  possible  the  compulsory  retirement  of  old  servants 
whose  powers  have  become  impaired  and  without  inflicting 
upon  them  grievous  pecuniary  hardship. 

THE  NEW  YORK  CITY  CIVIL  SERVICE 

In  a  recent  article  on  pensions  for  civil  service  employees 
Mr.  James  P.  Conway,  Assistant  Chief  Examiner  of  Mu- 


48  ? 

nicipal  Civil  Service  in  New  York  City,  speaking  of  the 
service  there  said  the  civil  service  employee  ranks  higher 
in  intelligence  on  entering  the  service  than  the  man  out- 
side. The  trouble  is  the  man  at  the  top  is  not  skilled  in 
his  job.  The  clerk  does  not  progress  after  a  certain  point, 
but  retrogrades  because  there  is  no  reward  for  superior 
skill,  and  he  becomes  the  victim  of  a  system.  There  are 
labor  unions  and  beneficial  associations  to  help  men  in 
many  other  callings-  The  clerk  can  only  look  to  the  gov- 
ernment which  has  taken  away  his  initiative  and  made  him 
a  machine. 

GROWING  DEMAND  FOR  PENSIONS  IN  INDUS- 
TRIAL LIFE 

It  is  becoming  more  and  more  apparent  that  pension  sys- 
tems assumed  voluntarily  by  corporations  to  reward  their 
employees  for  long  and  faithful  service  and  to  provide  for 
those  disabled  by  accident  in  the  service  will  become  a  part 
of  the  American  industrial  economy  in  the  not  distant 
future.  While  corporations  and  firms  employing  large 
numbers  of  men  have  commonly  taken  care  of  those  in- 
jured or  disabled  in  their  service,  usually  by  giving  them 
some  light  employment  at  reduced  pay,  and  so  with  super- 
annuated faithful  workers,  the  pension  system  enforced  on 
the  employers  of  Germany  by  Bismark  has  given  an  un- 
mistakeable  impetus  to  the  idea  in  all  industrial  countries. 
Industry  has  grown  so  rapidly  that  employers  are  no  longer 
personally  acquainted  with  their  employees.  Danger  to 
life  and  limb  has  increased  in  even  greater  proportion.  The 
number  of  men  killed  annually  in  railroad  employ  and  in 
industrial  accidents  has  been  a  potent  influence  in  creating 
a  public  sentiment  favorable  to  laws  requiring  industry  to 
bear  a  larger  share  of  the  loss  to  life  and  limb  which  it 
inflicts.     This  movement  is  evidenced  by  the  large  number 


49 

of  employers'  liability  and  workmen's  compensation  acts 
which  have  recently  been  passed.  The  German  state  sys- 
tem is  not  fitted  to  the  United  States,  but  there  is  strong 
public  sentiment  that  public  service  corporations  shall  pro- 
vide for  their  superannuated  and  disabled  employees. 
There  are  many  ways  in  which  corporations  encourage 
their  men  to  provide  for  the  future,  and  whatever  the 
method  the  idea  is  extending  through  all  forms  of  Amer- 
ican industry  and  is  contributing  to  a  spirit  of  thrift  and 
greater  conservatism  towards  employers  and  society  which 
must  work  for  a  more  solid  state  of  industrial  equilibrium 
and  will  uplift  the  masses. 

SOME  OF  THE  REMEDIES  SUGGESTED 

j 

In  its  19th  annual  report  the  Civil  Service  Commission 

discusses  some  of  the  remedies  proposed  for  the  evils  of 

superannuation  in  the  public  service  and  enumerates  the 

following : 

(a)  Fixed  terms  of  office. 

(b)  Provision  for  the  forced  retirement  of  a  certain 
percentage  of  employees  each  year- 

(c)  Forced  retirement  at  a  certain  age. 

(d)  Removal  made  upon  recurring  examinations  and 
daily   records  of  efficiency. 

And  in  connection  with  the  foregoing  enumerates  also: 
(i)  A  civil  pension  list. 

(2)  A  retirement  fund  made  up  by  deductions  from 
salaries. 

(3)  A  provision  requiring  endowment  or  deferred  an- 
nuity insurance  from  all  seeking  admission  to  the  civil 
service. 

The  Commission  disposes  of  the  first  four  suggestions 
as  not  worthy  of  consideration,  certain  to  entail  great  dis- 
aster to  the  public  service  and  inflicting  great  hardship  on 
those  who  have  long  been  faithful  servants  of  the  govern- 


so  -, 

ment.  A  straight  pension  plan  is  not  approved  because  of 
the  'expense  and  because  of  certain  abuses  which  would 
probably  follow  the  adoption  of  such  a  system.  A  contrib- 
utory plan  is  admitted  to  be  feasible  if  based  upon  a  sound 
acturarial  basis,  with  deductions  graduated  according  to 
age.  All  systems  of  this  kind  based  upon  a  flat  contribu- 
tion regardless  of  age  have  proved  failures.  Any  such 
plan  is  bound  to  fail  if  the  annuities  for  clerks  about  to 
retire  from  the  service  are  payable  from  the  contributions 
made  from  younger  clerks.  The  only  methods  by  which 
employees  already  in  the  government  who  are  superannu- 
ated or  are  approaching  that  point  can  have  their  future 
provided  for  is  by  an  appropriation  of  Congress. 

CIVIL  SERVICE  COMMISSION  PROPOSES  ANNU- 
ITY INSURANCE 

For  all  those  who  hereafter  enter  the  service  the  Com- 
mission recommends  annuity  insurance  as  having  many  ad- 
vantages over  any  other  system  of  providing  a  fund  for 
superannuation.  Among  the  other  advantages  of  this  sys- 
tem is  the  strict  physical  examination  which  would  be  re- 
quired in  order  to  obtain  insurance.  All  that  the  govern- 
ment would  do  in  a  system  of  this  kind  would  be  to  deduct 
the  premium  in  monthly  installments  from  the  salaries  of 
government  employees  and  to  secure  the  payment  of  the 
annuities  by  requiring  the  insurance  companies  to  deposit 
suitable  securities.  To  these  pure  deferred  annuities  should 
be  added  insurance  disability  and  also  if  the  employees  so 
desire  life  insurance,  although  of  course  these  features 
would  add  to  the  cost.  A  somewhat  similar  plan  was 
adopted  in  Victoria  in  1890. 

OPINION  OF  EX-PRESIDENT  ROOSEVELT 

Ex-President  Roosevelt  has  expressed  the  opinion  that 
there  will  be  ultimate  necessity   for   some   sort  of  a  civil 


51 

pension  list  for  federal  employees.  Congress  should  make 
some  provision  for  those  employees  who  have  given  their 
lives  to  the  government  service  but  who  must  be  removed 
when  they  grow  old  if  the  efficiency  of  the  service  is  to  be 
maintained.  The  humane  principle  of  providing  in  some 
degree  for  the  old  age  of  worthy  workers  is  finding  in- 
creasing recognition  by  employers  of  all  kinds  throughout 
the  world. 

NECESSITY  OF   STARTING  RIGHT 

The  adoption  by  the  United  States  of  any  pension  system 
for  its  civil  employees  will  mark  a  change  of  far  reaching 
consequences.  It  will  introduce  a  new  feature  into  a  system 
of  government  one  hundred  and  thirty-five  years  old  and 
add  a  new  item  of  expense  which  will  never  decrease  but 
will  be  bound  to  increase.  Such  an  innovation  can 
only  be  enacted  after  a  widespread  campaign  of  agitation 
and  education.  Taking  everything  into  consideration,  it  is 
more  important  to  start  right  than  to  start  at  an  early  date. 
The  friends  and  advocates  of  the  movement  cannot  afford 
to  make  the  mistake  of  urging  plans  which  are  unsound  or 
whose  cost  cannot  be  calculated  in  advance.  Congress  might 
readily  approve  a  pension  plan  involving  a  small  initial  ex- 
pense if  it  did  not  fear  that  the  cost  would  double  or 
even  treble  within  a  comparatively  few  years.  Con- 
gress must  be  pursuaded  that  a  pension  system  will 
work  for  efficiency  and  economy,  as  experience  has  dem- 
onstrated to  the  industrial  corporations  and  railroads  which 
now  pension  their  old  and  disabled  employees,  for  while 
humanitarian  motives  enter  into  the  consideration  these 
private  associations  pay  pensions  on  more  practical  and 
selfish  grounds. 

The  prevailing  sentiment  among  federal  employees  is  un- 
doubtedly in  favor  of  a  straight  civil  pension  system,  main- 
tained entirely  by  the  government,  and  in  support  of  their 
position  they  point  to  the  superannuation  systems  in  oper- 


52  • 

ation  on  the  railroads  of  the  country  which  are  with  very 
few  exceptions  kept  up  entirely  at  the  cost  of  the  employer 
and  without  any  contribution  from  the  employee;  and  as- 
sert further  that  it  would  be  very  unfair  and  practically 
impossible  for  federal  employees  to  contribute  any  amount, 
however  small,  from  their  present  inadequate  salaries,  to 
help  maintain  a  civil  pension  fund. 

On  the  other  hand,  the  superannuation  benefits  paid  by 
the  railroads  and  the  industrial  concerns  which  bear  the  en- 
tire expense  of  such  a  system  would  seem  very  inadequate 
to  government  employees,  for  they  are  scarcely  higher  than 
the  pensions  paid  for  military  services  rendered  in  time  of 
war.  This  is  made  plain  by  the  figures  here  given,  taken  in 
every  case  from  the  last  annual  report  that  was  available: 

U.  S.  Steel  Corporation  $240  to  $5,000  a  year 

Pennsylvania  Railroad  $241   a  year 

Canadian  Pacific  Railway  $274  a  yeai 

Delaware,  Lackawanna  &  Western  $275  a  year 

Big  Four  $206.76  a  year 

New  York  Central  $312.84  a  year 

Atchison-Topeka  &  Santa  Fe  $255  a  year 

Union  Pacific  $314  a  year 

BuflTalo,  Rochester  &  Pittsburg  $325.50  a   year 

Reading  Company  $362  a  year 

Philadelphia  Rapid  Transit  $240  a  year 

Brooklyn  Rapid  Transit  Co.  S240  to  $483.60  a  year 

Intercolonial  &  P.  E.  I.  Railways  $^18.72  a  year 

Southern  Pacific  Co.  $380.37  a  year 

While  there  is  a  very  wide  range  in  the  amount  of  pen- 
sion paid  by  the  Steel  Corporation,  it  is  very  likely  that  90 
per  cent  if  not  even  95  per  cent  of  those  receiving  such 
benefits  are  paid  the  minimum  figure.  The  employees  of 
the  last  three  companies  in  the  above  list  contribute  to  the 
pensions  that  they  receive.  It  will  be  noted  that  these  pen- 
sions scarcely  average  over  $20  a  month,  and  that  in  very 
few  cases  does  it  average  as  high  as  $25  a  month. 


53 

Federal  employees  must  bear  these  facts  in  mind  in  urg- 
ing upon  Congress  any  system  of  superannuation  benefits. 

OFFICIAL  RECOMMENDATIONS 

President  Taft  and  his  Cabinet  Officers  are  on  record  in 
favor  of  some  kind  of  a  retirement  law.  These  recom- 
mendations are  not  new  but  have  been  made  continuously 
for  the  past  five  or  six  years. 

President  Taft  when  he  was  Secretary  of  War  in  an  ad- 
dress delivered  May  21,  1906,  before  the  Civil  Service  Re- 
form League  of  Maryland,  spoke  as  follows: 

"Now  I  hope  some  time  we  will  come  to  the  establishment 
of  a  civil  pension  system  for  civil  servants  who  have  after 
years  of  service  reached  an  age  when  they  can  no  longer  be 
active.  The  system  which  soulless  corporations  adopt  be- 
cause they  know  it  to  be  for  the  benefit  of  their  stockholders 
it  seems  to  me  can  safely  be  adopted  by  our  government  for 
the  benefit  of  the  men  who  serve  it.  It  seems  to  me  it  might 
be  well  to  adopt  such  a  system  as  we  have  in  the  army  and 
navy  for  retired  soldiers  and  sailor*^.  There  is  a  bill  now 
pending  which  provides  for  a  compulsory  contribution  from 
government  employees  to  a  fund  designed  to  provide  for 
those  forced  to  retire.  I  do  not  know  whether  this  bill  will 
pass  or  not.  Ultimately  I  believe  we  will  come  to  the  time 
when  the  government  will  take  care  of  its  faithful  servants 
by  pensioning  them.  I  know  this  idea  is  not  a  popular  one 
and  I  know  the  protests  that  will  be  made,  but  I  hope  to  see 
it  nevertheless." 

Recommendations  by  the  President,  by  Members  of  the 
Cabinet,  by  heads  of  Bureaus,  and  Chiefs  of  Division  in 
favor  of  increase  of  salaries  and  the  adoption  of  some  re- 
tirement plan  might  be  quoted  at  great  len,G:th.  A  few  such 
extracts  are  given  below: 

The  Secretary  of  the  Interior  in  his  annual  report  for 
1907  said : 


54 

"The  present  need  in  the  public  service  is  a  readjustment 
and  re  classification  of  the  salaries  of  its  employees  and  some 
adequate  provision  for  the  retirement  of  those  who  are  by 
long  and  meritorious  services  entitled  to  peculiar  recog- 
nition." 


The  difficulty  of  dealing  with  superannuated  employees 
in  the  absence  of  a  retirement  system  is  shown  in  the  1907 
report  of  the  Secretary  of  Commerce  and  Labor  in  which 
he  says  as  follows: 


"As  a  rule,  the  persons  rated  below  the  required  standard 
are  employees  of  advanced  age  who  have  given  many  years 
of  service  to  the  government.  The  obstacles  in  the  way 
of  the  separation  of  such  employees  are  real  and  not  fancied. 
The  head  of  the  department,  while  not  forgetful  of  his  re- 
sponsibility, finds  it  a  difficult  task  to  direct  removal,  al- 
though it  is  conceded  that  the  persons  are  no  longer  render- 
ing efficient  service.  This  is  not  so  much  due  to  the  sym- 
pathy of  the  appointing  officers — although  it  is  possible  that 
this  may  have  some  weight — as  to  the  great  pressure  brought 
to  bear  by  prominent  men  and  w^omen  to  prevent  dismissal. 
This  is  a  condition  and  not  a  theory,  and  is  perhaps  the 
strongest  reason  for  the  enactment  of  a  law  for  the  retire- 
ment of  superannuated  employees." 

(Report  of  Inspector  General  E.  A.  Garlington,  1907.) 

"I  am  heartily  in  favor  of  the  proposition  to  grant  em- 
ployees in  the  classified  service  a  general  increase  of  20  per 
cent  in  their  present  salaries  and  also  of  such  legislation  as 
will  provide  a  system  for  the  retirement,  on  moderate  an- 
nuities, of  the  faithful  employees  who  become  superannua- 
ted in  the  public  service." 

(Report  of  the  Chief  of  the  Bureau  of  Insular  Affairs, 
1907.) 


55 

"Effort  has  been  made  with  considerable  success,  thanks 
to  the  cooperation  of  the  Civil  Service  Commission,  to  place 
returning  Philippine  employees  in  the  United  States  service 
at  home,  but  at  best  this  remedy  applies  but  irregularly  and 
to  certain  classes  of  employees.  The  bureau,  therefore,  be- 
came convinced  that  the  only  remedy  lies  in  placing  the 
faithful  employees,  after  a  number  of  years  of  foreign  ser- 
vice, in  a  pension  or  retired  status.        *        *        * 

"It  should  require  no  argument  to  show  that  the  present 
salaries  of  departmental  employees,  fixed  almost  sixty  years 
ago,  cannot  be  expected  to  meet  present  conditions,  with  the 
increase  in  cost  of  living  that  has  occurred  during  the  past 
few  years.        ♦        ♦        ♦ 

"Ag^in,  while  some  plan  for  the  ultimate  retirement  with 
some  proportional  part  of  their  pay  of  civil  service  employees 
who  devote  the  best  years  of  their  lives  to  the  government 
appears  necessary  to  the  maintenance  of  efficiency  in  the 
service,  it  cannot  appear  wholly  just  to  draw  largely  on  the 
present  limited  salaries  of  these  employees  to  establish  the 
funds  necessary  for  this  purpose." 

(Report  of  G.  M.  Gen.  J.  B.  Aleshire,  1907.) 

"Expression  has  heretofore  been  given  to  the  views  of  this 
office  on  the  subject  of  increased  pay  and  the  retirement  with 
pay  of  employees.  The  basis  upon  which  claim  for  increase 
of  pay  rests  in  the  increased  cost  of  living.  Clerks  are  now 
paid  according  to  a  rating  established  nearly  forty  years  ago, 
and  the  reasons  for  revising  and  increasing  this  pertain  as 
forcibly  to  clerks  as  those  officers  and  officials  of  the  govern- 
ment whose  needs  have  been  recognized  and  provided  for. 
The  $900  grade  for  clerks  in  this  office  should  be  abolished. 
It  is  only  with  great  difficulty  that  competent  men  can  be 
induced  to  accept  employment  at  this  rate,  and  as  promotions 
are  necessarily  slow  the  best  of  those  accepting  are  difficult 
to  retain." 

(President's  Annual  Message  to  61  st  Congress,  2nd  ses- 
sion, 1909.) 


S6 

"Under  the  present  system  it  constantly  happens  that  two 
employees  receive  the  same  salary  when  the  work  of  one 
is  far  more  difficult  and  important  and  exacting  than  that  of 
the  other.  Superior  ability  is  not  rewarded  or  encouraged. 
As  the  classification  is  now  entirely  by  salary,  an  employee 
often  rises  to  the  highest  class  while  doing  the  easiest  work, 
for  which  alone  he  may  be  fitted.  An  investigation  ordered 
by  my  predecessor  resulted  in  the  recommendation  that  the 
civil  service  be  reclassified  according  to  the  kind  of  work, 
so  that  the  work  requiring  most  application  and  knowledge 
and  ability  shall  receive  most  compensation.  I  believe  such 
a  change  would  be  fairer  to  the  whole  force  and  would  per- 
manently improve  the  personnel  of  the  service. 

''More  than  this,  every  reform  directed  toward  improve- 
ment in  the  average  efficiency  of  government  employees 
must  depend  upon  the  ability  of  the  executive  to  eliminate 
from  the  government  service  those  who  are  inefficient  from 
any  cause,  and  as  the  degree  of  inefficiency  in  aU  the  depart- 
ments is  much  lessened  by  the  retention  of  old  employees 
who  have  outlived  their  energy  and  usefulness,  it  is  indis- 
pensable to  any  proper  system  of  economy  that  provision  be 
made  so  that  their  separation  from  the  service  shall  be  easy 
and  inevitable.  It  is  impossible  to  make  such  provision  un- 
less there  is  adopted  a  plan  of  civil  pensions. 

''Most  of  the  great  industrial  organizations,  and  many  of 
the  well-conducted  railways  of  this  country,  are  coming  to 
the  conclusion  that  a  system  of  pensions  for  old  employees 
and  the  substitution  therefor  of  younger  and  more  ener- 
getic servants,  promotes  both  economy  and  efficiency  of 
administration. 

"I  am  aware  that  there  is  a  strong  feeling  in  both  Houses 
of  Congress,  and  possibly  in  the  country,  against  the  estab- 
lishment of  civil  pensions,  and  that  this  has  naturally  ^rown 
out  of  the  heavy  burden  of  military  pensions,  which  it  has  al- 
ways been  the  policy  of  our  government  to  assume ;  but  I  am 
strongly  convinced  that  no  other  practical  solution  of  the 
difficulties  presented  by  the  superannuation  of  civil  servants 
can  be  found  than  that  of  a  system  of  civil  pensions." 


57 

(President's  Annual  Message  to  Congress,  1910.) 

*  *  *  "It  is  impossible  to  proceed  far  in  such 
an  investigation  without  perceiving  the  need  of  a  suitable 
means  of  eliminating  from  the  service  the  superannuated. 
This  can  be  done  in  one  of  two  ways — either  by  a  straight 
civil  pension  or  by  some  form  of  contributory  plan." 

(Report  of  the  Secretary  of  the  Treasury,  1910.) 

"But  this  is  clear,  that  any  successful  effort  to  improve  the 
administrative  operations  of  a  large  department  like  the 
Treasury  is  immediately  handicapped  and  might  well  be 
discouraged  entirely  by  the  absence  of  a  just  method  of  re- 
tirement. And  even  when  it  is  possible  to  protect  these  dis- 
placed clerks  from  being  thrown  into  the  streets,  it  is  done, 
in  many  cases,  in  denial  of  the  right  of  an  office  to  efficient 
help.  Working  in  these  improvements  brings  constantly 
to  mind  the  hopelessness  of  ever  arriving  at  a  complete  state 
of  efficiency  without  a  way  of  retiring  clerks  in  a  just  and 
humane  manner.  I  have  no  doubt  that  this  very  discourag- 
ing feature  has  in  the  past  stood  in  the  way  of  many  attempts 
to  improve  the  efficiency  and  economize  the  expense  of  oper- 
ation in  the  departments." 

(Report  of  Secretary  of  Commerce  and  Labor,  191  o.) 

"Probably  no  question  dealing  with  the  personnel  of  the 
service  has  been  so  seriously  considered  during  the  past 
year  as  that  relating  to  superannuation.  Most  civilized 
countries  now  provide  equitable  means  for  the  retirement 
of  their  employees,  as  do  many  of  the  state  and  municipal 
governments,  as  well  as  corporations  and  large  industries, 
of  this  country.  The  problem  was  encountered  and  dealt 
with  in  the  United  States  Army  and  Navy  50  years  ago.  It 
is  now  critically  present  and  awaiting  solution  in  the  civil 
departments  of  the  government.  While  many  unacquainted 
with  actual  conditions  have  frequently  approached  the  sub- 


S8 

ject  in  the  spirit  of  humanitarianism,  most  of  those  in  and 
out  of  the  service  now  look  upon  superannuation  as  an 
unavoidable  contingency  which  must  be  met  by  the  appli- 
cation of  modern  ideas  and  strictly  business  principles. 
Until  this  is  done  department  officials  will  continue  to  bear 
the  burden  of  an  inefficient  force  rather  than  place  them- 
selves on  record  as  removing,  or  even  reducing,  a  public 
servant  who  has  become  incapacitated  while  in  the  faithful 
performance  of  duty.  Therefore,  while  humanitarian  rea- 
sons may  have  at  first  suggested  the  advisability,  and  in  fact 
the  duty,  of  providing  a  system  of  retirement,  it  is  now 
being  recognized  quite  generally  that  the  conditions  are 
such  as  to  more  than  justify  it  from  a  strictly  economical 
point  of  view.  The  retirement  of  aged  and  superannuated 
employees  under  some  liberal  system  would  likely  result 
in  a  positive  financial  saving  by  creating  opportunity  for 
the  employment  of  young  men  who  are  able  to  do  two  or 
three  times  as  much  work  for  the  salaries  paid.  It  is  there- 
fore important  that  the  subject  have  serious  attention,  to 
the  end  that  the  government  may  be  conducted  in  the  most 
economical  manner  and  at  the  same  time  provision  be  made 
for  faithful  srvants  who  have  devoted  their  entire  lives  to 
the  transaction  of  the  public  business. 

"Reports  recently  submitted  by  the  Bureau  officers  show 
that  there  are  103  employees  in  the  department  65  years 
of  age  or  over  whom  they  would  be  willing  to  recommend 
for  retirement  if  some  suitable  system  of  providing  an 
annual  income  were  in  force.  The  aggregate  salaries  of 
these  employees  is  $110,645.46,  of  which  $28,100.77  is  said 
to  be  unearned." 

(Report  of  the  Secretary  of  War,  1910.) 


"I  renew  the  recommendation  made  in  my  annual  re- 
port last  year  that  some  provision  be  made  for  the  retire- 
ment on  annuities  of  employees  who  have  become  super- 
annuated in  the  service,  thus  following  the  practice  which 


59 

many  railroads  and  other  large  business  enterprises  have 
found  it  advisable  to  adopt." 

(From  the  report  of  the  Commissary-General,  1910.) 

"I  also  earnestly  recommend  the  passage  of  a  measure 
providing  for  the  retirement  on  some  equitable  plan  of  old 
and  faithful  superannuated  employees  of  the  government 
for  the  reason  that  it  would  result  in  marked  improvement 
in  the  service. 

•'First,  by  attracting  a  better  class  of  employees,  a  large 
percentage  of  whom  by  reason  of  the  provision  for  old  age 
would  remain  in  and  make  the  service  their  career,  becom- 
ing expert  in  their  particular  line  of  work  to  the  distinct 
advantage  of  the  government;  and  there  never  was  a  time 
when  the  highest  qualifications  and  equipment  were  more 
needed  in  the  service  than  at  present. 

"Second,  by  the  added  incentive  held  out  to  each  em- 
ployee to  do  his  best  in  order  to  obtain  promotion  to  higher 
grades,  and  later,  profiting  by  increased  retired  pay. 

"Third,  by  the  periodic  and  automatic  elimination  of 
those  whose  efficiency  has  been  impaired  by  age  or  infirm- 
ity and  the  introduction  of  younger  and  more  vigorous 
men,  thereby  maintaining  an  active  and  efficient  working 
force  and  making  it  possible  in  time  to  transact  the  business 
with  fewer  employees. 

"Fourth,  aside  from  all  sentimental  consideration,  it  is 
believed  that  the  service  would  be  greatly  improved  if  it 
should  be  known  to  all  who  enter  it  that  provision  is  made 
for  the  support  of  themselves  and  their  families  when  old 
age  comes  upon  them-  It  would  be  an  inducement  for 
men  not  only  to  remain  in  the  service  but  to  deport  them- 
selves in  such  a  manner  as  to  do  nothing  to  forfeit  so  valu- 
able a  provision. 

"Fifth,  because  in  cases  of  protracted  illness,  employees 
worry  over  the  possibility  of  being  discharged  and  the 
anxiety  tends  to  retard  their  recovery  and  return,  whereas 
if  they  were  free  from  this  apprehension  and  felt  secure 
of  being  provided  for  in  the  event  of  becoming  incapaci- 


6o 

tated,  their  strength  and  courage  would  be  sustained  and 
recovery  assisted  rather  than  impeded. 

"Sixth,  because  railroads,  corporations  and  commercial 
houses  recognize  and  reward  long  and  faithful  service  by 
retirement  and  regard  it  as  a  good  business  investment; 
and  other  governments  also  make  some  provision  for  theit 
aged  and  worn  out  civil  servants." 

(Report  of  the  Secretary  of  the  Interior,  1910.) 

"The  appropriation  for  the  maintainance  of  the  service 
of  the  Department  and  of  its  buildings  and  grounds  can 
be  lessened  only  by  unification  and  simplification  of  busi- 
ness methods  in  the  several  bureaus  and  the  establishment 
of  a  retirement  fund  for  government  employees.  So  long 
as  a  retirement  fund  is  withheld,  the  practice  of  pension- 
ing superannuated  and  defective,  though  deserving  clerks, 
by  retaining  them  on  the  salary  roll  must  continue.  This 
necessarily  results  in  many  competent  persons  receiving 
inadequate  salaries  and  a  reluctance  to  reward  the  highest 
grade  of  service  by  compensatory  remuneration." 

EXTRACTS  FROM  ANNUAL  REPORTS  FOR  191 1. 

President's  Message  of  December  21,  191 1 

I  have  already  advocated,  in  my  last  annual  message,  the 
adoption  of  a  civil  service  retirement  system,  with  a  contri- 
butory feature  to  it  so  as  to  reduce  to  a  minimum  the  cost 
to  the  Government  of  the  pensions  to  be  paid.  After  con» 
siderable  reflection,  I  am  very  much  opposed  to  a  pension 
system  that  involves  no  contribution  from  the  employees. 
I  think  the  experience  of  other  governments  justifies  this 
view;  but  the  crying  necessity  for  some  such  contributory 
system,  with  possibly  a  preliminary  governmental  outlay, 
in  order  to  cover  the  initial  cost  and  to  set  the  system  going 
at  once  while  the  contributions  are  accumulating,  is  mani- 


6i 

fest  on  every  side.  Nothing  will  so  much  promote  the 
economy  and  efficiency  of  the  Government  as  such  a  sys- 
tem. 

Secretary  of  the  Treasury,  191 1 

The  possible  extent  of  efficiency  and  economy  that  is  at- 
tainable by  any  of  the  departments  is  rigidly  restricted  by 
the  lack  of  a  retirement  allowance  and  system.  In  a  Gov- 
ernment so  generous  and  intelligent  as  ours,  the  absence 
of  a  civil  retirement  system  is  singularly  inappropriate  and 
inexplicable.  Self-interest  alone  ought  to  secure  this  en- 
lightened provision  for  the  civil  employees,  not  to  speak 
of  the  human  interest  which  in  this  regard  in  now  almost 
universally  felt  and  adopted.  Not  only  Governments  but 
an  ever  increasing  number  of  private  corporations  have 
provided  a  retiring  system  for  their  employees.  Indeed, 
the  adoption  of  a  provision  retiring  members  of  the 
civil  service  has  become  so  usual  and  so  a  matter  of 
course  that  America  is  the  only  important  civilized  Gov- 
ernment which  does  not  recognize  this  as  a  national  duty 
both  to  the  employees  and  to  the  Government  and  people. 
And  this  Government  would  not  at  this  late  date,  I  believe, 
be  laggin<2:  in  this  important  resf>ect  so  far  behind  all  its 
world  neighbors  but  for  the  unhappy  disputes  of  our  Gov- 
ernment clerks.  So  far  the  clerks  appear  to  have  no  leaders 
or  leadership  equal  to  the  occasion ;  and  unless  something 
adequate  in  the  way  of  this  necessary  leadership  shall  arise 
it  is  only  too  likely  that  nothing  will  be  soon  accomplished. 
And  yet  the  responsibility,  after  all,  rests  upon  the  Gov- 
ernment and  especially  upon  the  Congress — and  the  Con- 
gress should,  of  course,  ignore  the  unfortunate  disagree- 
ments among  the  clerks  and  take  the  matter  into  its  own 
hands. 

The  executive  departments  are  suffering  extremely  for 
want  of  a  retirement  law;  and  all  improvements  of  the 
public  service  have  to  constantly  meet  the  discouragements 
of  this  condition,  while  much  improvement  is  by  this  con- 


62  ^ 

dition  discouraged  even  from  a  beginning.  I  appeal, 
therefore,  to  Congress  again,  as  I  have  done  each  year,  in 
behalf  of  such  a  law.  Every  consideration  of  humanity, 
economy  and  efficiency,  that  is  conceivably  related  to  the 
question,  calls  for  action  at  this  session. 

The  retirement  system  which  I  consider  most  in  the  in- 
terest of  the  clerks  themselves  is  the  contributory  system; 
and  that  would  cost  the  Government  no  money  whatever — 
if  that  were  thought  to  be  desirable.  That  this  system  could 
be  put  in  operation  without  increased  expenditures,  I  be- 
lieve is  entirely  true ;  and  I  think  it  could  be  adopted  with 
the  provision  that  each  department  should  put  it  into  oper- 
ation without  any  cost  to  the  Government;  but  it  is  at 
the  same  time  a  question  whether  that  would  be  the  best 
course  to  pursue.  This  contributory  system,  if  adopted, 
would  leave  the  claims  of  the  clerks  to  revised  or  higher 
salaries  unaffected.  On  the  other  hand,  the  so-called  straight 
pension — the  pension  paid  wholly  by  the  government — 
would  take  the  place  of  any  possible  advance  in  salaries  for, 
at  any  rate,  a  considerable  period,  not  withstanding  the  fact 
that  under  such  a  system  comparatively  few  of  the  clerks 
would  ever  become  beneficiaries. 

However,  some  system  of  retiring  allowance  is  so  greatly 
needed  as  an  aid  to  economy  and  efficiency,  that  I  would  be 
glad  to  see  any  system  adopted  which  could  be  put  into 
effect  immediately;  for  any  system  could  be  changed  after 
experience  showed  its  defects. 

Secretary  of  War,  191 1 

I  am  heartily  in  favor  of  some  measure  by  which  em- 
ployees of  the  Federal  Government  may  be  retired  and  pen- 
sioned when  they  reach  a  condition  of  impaired  usefulness 
after  years  of  faithful  service.  In  taking  such  action  we 
should  only  be  following  the  world-wide  trend  of  national 
governments  and  large  business  corporations,  whether  we 
find  warrant  for  such  action  in  humanitarian  principles  or 
considerations  of  a  sound  business  policy,  or  both  combined. 


63 

The  purely  monetary  rewards  and  opportunities  of  the 
Government  service  ought  not  to  be  and  never  will  be  so 
great  as  those  offered  in  the  business  and  professional  world 
elsewhere,  and  if  the  Government  service  is  to  be  maintained 
upon  a  high  and  increasing  level  of  proficiency  it  must  meet 
the  competition  from  other  quarters  by  some  compensating 
features  that  will  attract  the  best  talent  to  its  service  and 
retain  it. 

While  I  am  not  prepared  to  express  a  decided  conviction 
as  between  a  straight-out  Government  pension  and  one  to 
which  the  employee  himself  shall  have  contributed  a  por- 
tion, there  is  abundant  proof  that  the  Government,  in  effect, 
though  indirectly,  has  for  many  years  throughout  its  service 
maintained  a  pension  system  without  retirement,  and  if  it 
should  now  establish  a  pension  system  with  retirement  there 
is  good  reason  to  believe  that  in  the  long  run  it  would  not 
only  suffer  no  pecuniary  loss,  but  on  the  contrary  would  reap 
a  substantial  gain  in  the  increased  efficiency  and  improved 
morale  of  the  service. 

The  Attorney  General,  191 1 

The  salaries  paid  to  members  of  the  classified  civil  service 
are  not  large,  and  they  have,  therefore,  very  little  oppor- 
tunity for  saving.  Some  provision  should  be  made  by  Con- 
gress by  way  of  a  retirement  law  to  secure  to  faithful  service 
over  many  years  at  least  that  ordinary  meed  of  justice  which 
is  coming  to  be  recognized  as  due  from  all  private  em- 
ployers under  similar  circumstances. 

The  Postmaster  General,   191 1 

Almost  without  exception,  foreign  nations  provide  for 
the  p>ensioning  of  civil  service  employees  when  they  become 
superannuated.  Large  corporations  in  this  country  are 
rapidly  adopting  the  same  principle  in  the  retirement  of 
their  aged  employees.  On  business  grounds,  if  for  no  other 
reason,  the  Government  should  do  likewise. 


64  7 

While  the  compensation  of  postal  employees  has  been 
considerably  increased  during  the  last  few  years  it  is  hardly 
more  than  sufficient  to  meet  necessary  living  expenses  and 
consequently  does  not  permit  the  putting  aside  of  any  con- 
siderable savings  against  old  age.  It  is  believed  that  a 
civil  pension  based  on  length  of  employment  should  be 
granted  by  the  Government.  Benefits  to  the  service  far 
outweighing  the  expense  of  such  pensions  would  undoubt- 
edly result. 

Secretary  of  the  Navy,  191 1 

During  the  past  few  years  great  stress  has  been  laid,  by 
heads  of  departments  and  others,  upon  the  fact  that  the 
schedule  of  salaries  for  clerical  employees  in  the  executive 
departments  in  Washington  has  not  been  revised  since  the 
passage  of  the  act  of  April  22,  1854. 

As  a  matter  of  fact,  the  schedule  of  1854  has  been  revised 
downward.  Of  the  employees  engaged  in  clerical  and  techni- 
cal work  in  the  departments  in  Washington,  approximately 
25  per  cent  now  receive  less  than  $1,200  per  annum,  the 
minimum  salary  prescribed  for  clerical  services  in  the  act  of 
1854,  and  in  the  Navy  Department  this  percentage  is  33. 

I  am  of  the  opinion  that  existing  conditions  as  to  cost  of 
living  warrant  a  general  increase  in  compensation  for  all  de- 
partments of  the  Government;  but  if  Congress  is  not  ready 
to  make  a  general  increase,  it  should  at  least  equalize  the 
compensation  of  positions  of  the  higher  grades. 

Not  only  should  increased  compensation  be  provided  for 
the  clerks,  but  legislation  should  be  enacted  looking  to  the 
establishment  of  some  form  of  civil  service  retirement.  I 
am  not  prepared  at  this  time  to  advocate  any  particular 
system,  believing  that  this  is  a  matter  which  should  be  de- 
termined by  Congress  after  careful  consideration  ;  but  unless 
some  provision  be  made  for  the  pensioning  or  retiring  of 
superannuated  civil  employees  the  Government  can  never 
hope  to  secure  the  most  efficient  and  satisfactory  service. 

There  is  no  class  of  employees  who  are  more  deserving  of 
increased  compensation  and  retirement  with  reasonable  pay 


65 

than  the  employees  of  the  Government.  Very  few  of  them 
are  able  to  accumulate  much,  if  anything,  during  their  long 
years  of  service,  and  when  old  age  disability  does  come  to 
them  they  must  either  be  carried  as  a  burden  on  the  Gov- 
ernment's rolls  or  thrown  out  on  the  world  with  no  suitable 
provision  for  their  last  years. 

But,  aside  from  all  sentimental  considerations,  I  believe 
that  civil  service  retirement  by  the  Government  would  be 
along  the  lines  of  sound  business  management.  Many  rail- 
roads and  industrial  corporations  have  found  it  advisable 
to  adopt  such  a  system,  and  the  practice  is  a  growing  one. 

I  earnestly  recommend  that  suitable  legislation  be  had  in 
this  matter. 

Secretary  of  the  Interior,  191 1 

I  earnestly  recommend  the  enactment  of  legislation 
authorizing  the  retirement  of  employees  who,  after  long 
and  faithful  service,  are  disabled  by  age  or  infirmity  from 
the  efficient  performance  of  their  duties.  The  civil  ser- 
vants of  the  Government,  like  those  in  the  military  and 
naval  service,  are  debarred  from  the  chance  of  large  gains, 
the  hope  of  which  is  the  constant  stimulus  to  men  in  private 
business.  Moreover,  those  of  technical  or  superior  admin- 
istrative ability  are  and  must  continue  to  be  paid  smaller 
salaries  than  they  would  command  in  private  employment. 
It  is  therefore  impossible  for  them  to  acquire  financial  in- 
dependence or  make  due  provision  for  old  age,  either  by  way 
of  profits  or  by  way  of  savings  from  their  salaries.  Consid- 
erations of  humanity  and  justice  might  well  be  urged 
against  the  dismissal  of  employees  who  have  given  the  years 
of  their  strength  to  faithful  and  efficient  public  service  and 
against  their  assignment  to  the  lower  grades  of  menial  or 
clerical  duties  as  an  alternative  to  dismissal.  But  I  prefer 
to  put  the  matter  on  other  and  more  selfish  grounds.  The 
Government  simply  can  not  aflFord  not  to  retire  these  em- 
ployees with  due  and  honorable  provision  for  their  old  age, 
and  this  for  two  reasons. 
$ 


66 

In  the  first  place,  many  able  and  energetic  men  serve  the 
Government  at  salaries  far  below  the  commercial  standard 
for  like  services.  They  choose  to  do  so  because  the  public 
service  satisfies  their  best  and  highest  ideals  of  personal  in- 
tegrity and  professional  achievement.  Such  men  are  con- 
tinually forced  out  of  the  service  by  the  necessity  of  making 
due  provision  for  themselves  and  their  families  before  old 
age  comes  upon  them.  If  the  Government  would  insure 
them  against  this  peril  it  could  continue  to  employ  them  at 
salaries  far  less  than  a  private  corporation  would  be  com- 
pelled to  pay.  Every  consideration  of  economy  and  sound 
business  policy  requires  that  their  services  should  be  retained 
on  terms  so  favorable  to  the  Government.  The  loss,  taken 
in  the  mass,  is  irreparable,  for  the  system  operates  as  a 
survival  of  the  unfittest  by  continually  drawing  off  the  more 
energetic  and  abler  men,  leaving  a  larger  and  larger  propor- 
tion of  the  inefficient  in  the  public  service.  In  the  second 
place,  the  Government  is  paying  much  if  not  most  of  the 
cost  of  a  proper  retirement  system  through  the  inevitable 
relative  inefficiency  of  the  present  plan.  Not  only  are 
superannuated  employees  dropped  to  and  retained  in  the 
lower  grades  because  of  sympathy  yielding  to  personal  or 
political  pressure,  but  in  the  higher  grades,  from  which 
the  rank  and  file  of  the  service  inevitably  derives  its  spirit 
and  tone,  there  is  a  tendency  to  retain  men  who  have  lost 
the  alertness  and  enthusiasm  essential  to  the  highest  effi- 
ciency of  their  own  work,  and  still  more  essential  for  inspir- 
ing in  and  requiring  of  their  subordinates  such  alertness  and 
enthusiasm.  Not  only  do  they  thus  fail  to  make  the  positive 
contribution  to  the  general  efficiency  of  the  service  which  is 
due  from  men  in  their  position,  but  they  have  a  negative 
effect  in  the  same  direction  by  blocking  the  avenues  of  pro- 
motion and  legitimate  ambition.  The  men  below  them  not 
only  fail  to  receive  the  proper  stimulus  of  precept  and  ex- 
ample, but  are  at  the  same  time  deprived  of  the  hope  of  pro- 
motion which  ought  to  be  the  reward  of  efficient  service. 

This  condition  is  now  becoming  apparent.  It  has  been 
delayed  by  the  fact  that  the  widespread  application  of  the 


67 

principle  of  permanency  in  the  public  service  goes  back  less 
than  one  generation,  and  by  the  further  fact  that  the  in- 
dustrial and  social  problems  of  recent  years  have  forced 
the  Government  into  new  fields  of  activity  and  thus  com- 
pelled the  organization  of  new  bureaus  and  departments. 
These  new  administrative  units  have  been  largely  recruited 
from  young  men  who  are  still  in  the  prime  of  life.  Many 
of  the  older  bureaus  and  departments  have  from  similar 
causes  largely  increased  their  personnel,  recruiting  them 
chiefly  from  young  men.  This  sudden  expansion  of  gov- 
ernmental activity  has  postponed  and  mitigated  the  worst 
evils  inherent  in  the  present  system;  but  sudden  expansion 
can  not  continue  indefinitely.  We  must  face  and  provide 
for  normal  conditions  of  growth.  Under  such  conditions 
general  efficiency  in  the  public  service  is  impossible  without 
due  provision  for  the  retirement  of  aged  employees.  This  is 
attested  by  the  experience  and  practice  of  foreign  govern- 
ments, which  have  long  had  a  permanent  civil  service  and 
by  that  of  large  railroads  and  commercial  corporations  in 
our  own  country. 

Secretary  of  Commerce  and  Labor,  191 1 

Superannuation  in  the  civil  service  and  the  proposed  re- 
tirement of  employees  who  have  passed  their  age  of  greatest 
usefulness  have  attracted  much  attention.  Considerable 
discussion  of  the  subject  has  appeared  in  the  public  press, 
and  many  Government  officials  in  reporting  on  conditions 
aflfecting  the  personnel  of  their  respective  departments  or 
offices  have  laid  more  or  less  stress  on  the  evils  of  super- 
annuation in  the  service  and  the  necessity  of  providing,  as 
has  been  done  by  a  number  of  countries  and  private  business 
concerns,  some  equitable  scheme  of  retirement  of  those  who 
are  no  longer  able  to  render  a  fair  degree  of  service,  but 
who  would  be  left  without  adequate  means  of  support  if 
dismissed.  Many  difficulties,  of  course,  may  be  expected  to 
attend  the  passage  of  any  law  looking  to  the  retirement  on 
pay  of  superannuated  employees  in  the  civil  service,  whether 


68 

such  retirement  is  accompanied  by  annuities  paid  outright 
by  the  Government  or  whether  it  is  made  possible  by  con- 
tributions in  whole  or  in  part  by  the  employees  themselves. 
Incomplete  reports  recently  received  from  the  bureaus 
show  that  there  are  yz  employes  of  this  Department  who  are 
more  or  less  superannuated;  that  the  agggregate  of  their 
salaries  is  $73,385 ;  and  that  their  average  age  is  70  years. 
Perhaps  a  greater  amount  of  superannuation  and  consequent 
loss  to  the  Government  may  be  found  in  the  older  depart- 
ments and  offices.  As  this  Department  last  year  recorded 
its  opinion  on  the  subject  of  superannuation,  it  is  unneces- 
sary to  again  point  out  the  advantages  and  economy  that 
would  result  from  the  retirement,  which  practically  every- 
one admits  should  be  on  an  adequate  annuity,  of  the  civil 
employees  of  the  Government  who  have  become  inefficient 
through  advancing  age. 

President's  Message,  January  17,  1912. 

Attention  has  been  directed  in  recent  years  to  the  need 
of  a  suitable  plan  for  retiring  the  superannuated  employees 
in  the  executive  civil  service.  In  the  belief  that  it  is  de- 
sirable that  any  steps  toward  the  establishment  of  such  a 
plan  shall  be  taken  with  caution,  I  instructed  the  commission 
to  make  an  inquiry  first  into  the  conditions  at  Washington. 
This  inquiry  has  been  directed  to  the  ascertainment  of  the 
extent  to  which  superannuation  now  exists  and  to  the  con- 
sideration of  the  availibility  of  the  various  plans  which 
either  have  been  proposed  for  adoption  in  this  country  or 
have  actually  been  adopted  in  other  countries.  I  shall  sub- 
mit, in  the  near  future,  for  the  consideration  of  the  Congress 
a  plan  for  the  retirement  of  aged  employees  in  the  civil  ser- 
vice which  will  safeguard  the  interests  of  the  Government 
and  at  the  <='  me  time  make  reasonable  provision  for  the 
needs  of  those  who  have  given  the  best  part  of  their  lives 
to  the  service  of  the  State. 


iU. 


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MAR  13  1936 

LD  21-100m-7,'33 

